Allocation of voluntary redress payments in the context of Enforcement cases

Publication date
29th June 2016
Closing date
24th August 2016
Policy area
Status

Voluntary redress payments are paid by companies investigated by us to suitable charities, trusts and organisations. Such payments are separate from (and can be in addition to) compensation payments made directly to consumers harmed by the companies’ wrongdoing. Voluntary redress payments are in lieu of, or in addition to, a financial penalty. The allocation of voluntary redress payments takes place after we agree the amount of the payments with the company.

The value of voluntary redress payments going to charities, trusts and organisations to date and the numbers of consumers who have benefited because of those payments have been substantial. For example, for settled cases in 2014 and 2015, £73.5 million went to charitable organisations. The work undertaken by those organisations as a result of this voluntary redress funding ultimately benefited 223,000 consumers.

We want to make sure that these payments deliver maximum benefit for Great Britain’s energy consumers. This consultation outlined options for improving the redress allocation process.

The consultation closed on 24 August 2016. Following consideration of responses to the consultation and wider stakeholder engagement, we have decided to engage an expert third party organisation to allocate, manage and monitor voluntary redress payments.

This will make sure that funding is well targeted, and is the best way to maximise the long-term positive impact of voluntary redress payments for energy consumers across Great Britain, and in particular those in vulnerable circumstances. For further details please see the decision document below.

All non-confidential responses to the consultation are published below. These responses do not represent the views of Ofgem.

Response documents