Ofgem is requiring suppliers to take part in trials to find out the best ways of helping disengaged customers get a better deal.
The trials are one of the remedies put forward by the Competition and Markets Authority (CMA) following its energy market investigation. The CMA found that two-thirds of customers who are on standard variable tariffs are paying far more than they need to.
Ofgem is working to deliver a smarter, fairer, more competitive energy market. The CMA recommended that Ofgem lead a programme of trials to identify more effective prompts and information to help customers get more out of the market.
The rules mean that Ofgem can require suppliers to undertake trials, which will start by this summer. They will cover issues including:
Rachel Fletcher, senior partner, consumers and competition said: “We must end the two- tier market where only a third of people get the best deals, while the remainder do not benefit from competition.
“By overseeing these trials, we will make sure that suppliers are doing everything they can to test ways to help these customers find better deals. This could be through switching supplier, or helping loyal customers find cheaper tariffs with the current supplier.
“As the market develops, we want to ensure that customers in vulnerable situations are not left behind. So we are making clear that suppliers have a special responsibility to these customers. We are proposing an enforceable principle for suppliers to make all efforts to identify and support them.”
In December, Ofgem published data on the number of customers on standard variable tariffs per supplier, and the gap between these tariffs and some of the cheapest in the market. This adds to transparency around this issue.
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For facts, figures and information about Ofgem’s work, see Energy facts and figures or visit the Ofgem Data Portal.
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