- Electricity Supply Licence
- Gas Supplier Licence
Today (Tuesday 22 November 2022), energy regulator Ofgem has published findings into the third of its series of ‘deep dives’ into how energy suppliers are helping customers this winter and beyond.
Ofgem is committed to driving service standards up for consumers, and, this latest review, which looks specifically at how suppliers treat ‘Customers in a Vulnerable Situation’ has considered information submitted by 17 of the biggest domestic energy suppliers, detailing how the companies are:
- Identifying and recording customers in a vulnerable situation, and if they are adding them to the ‘Priority Services Register’, which offers additional support to customers in need
- Making free gas safety checks available to eligible customers
- Ensuring vulnerable customers on prepayment meters are identified and supported
- Providing useful information appropriate to customer needs
Since Ofgem's initial assessment and ratings were formed, many suppliers have already responded positively based on the feedback from the review. All the action taken from all the Market Compliance Reviews so far can now be seen collectively.
Findings showed that, although some good practice was identified, all suppliers need to make further improvements, with the key findings being:
- Severe weaknesses were found in five suppliers – Good Energy, Outfox, SO Energy, TruEnergy, Utilita
- Moderate weaknesses were found in five suppliers – E (Gas & Electricity), Ecotricity, Green Energy UK, Octopus and Shell
- Minor weaknesses were found in seven suppliers - British Gas, Bulb, EDF, E.ON, Ovo, Scottish Power and Utility Warehouse.
Suppliers have engaged positively with the process and, since receiving their indicative ratings in October, are taking swift action to make the improvements needed. This open and cooperative approach to improving protections for vulnerable customers is welcomed by the energy regulator.
Neil Lawrence, Director of Retail at Ofgem, said:
“From eligible customers who are missing out on free gas safety checks through to companies not identifying vulnerable customers to be offered obvious support on the Priority Services Register, this robust review has highlighted that suppliers need to do more to support consumers.
“We welcome the cooperation from suppliers and action taken so far, and, although we are seeing some very good practice in parts of the industry, we can see there is still much more to be done.
Most suppliers take the protection of vulnerable customers seriously and several good initiatives to support customers have been launched recently. While it’s encouraging to see the engagement on this Market Compliance Review, with some improvement actions already taking place, we’ve seen a number of failings across the board which need to be urgently addressed. It’s going to be a very challenging winter for everyone, and customers must be confident they are getting the help and support they need.
My message to suppliers today is simple- be proactive. Help your customers to know what support is available, and then deliver it.”
Some good practice was also identified as part of the review, with some suppliers offering ‘cash grants towards energy bills’ for customers, and many energy companies signing up to Energy UK’s Vulnerability Commitment.
Ofgem communicated the ratings to all suppliers earlier this month and, since then, has started compliance engagement on the areas for improvement. The regulator will be keeping a close eye on the actions taken to close the gaps identified through this assessment and will consider enforcement action under its Enforcement Guidelines where necessary.
On the back of this latest review, and supported by Ofgem’s ongoing ‘energy aware’ winter campaign, customers can also check if they are eligible for extra support on the Priority Services Register by visiting www.ofgem.gov.uk/EnergyAware or by contacting their supplier directly.
The next market review, expected at the start of next year, will look at customer service.
NOTES TO EDITORS
The robust series of Market Compliance Reviews (MCRs) spearheaded by Ofgem so far have led to the following key actions being taken:
- Following our first MCR into direct debits, 16 suppliers have now commissioned their own internal audits into direct debit arrangements,
- Provisional Orders (enforcement notices) have already been issued to Tru Energy and Scottish Power as a result of failings found by Ofgem and improvement action, to come back into compliance with licence obligations, has been taken by the companies as a result,
- Compliance engagement is taking place across the majority of suppliers to ensure improvements are made where we have identified they are needed;
- A ‘best practice’ guide, for customers has been developed. Good practice for supporting customers in payment difficulty | Ofgem.
- We've published a letter about our expectations of suppliers, following the review into customers who are struggling with bills.
Suppliers are being required to rapidly complete the actions set for them in this latest Market Compliance Review, with improvements required on:
- having clearer policies and procedures to identify customers in vulnerable circumstances
- ensuring customer-facing staff are trained appropriately to identify and support customers in vulnerable situations
- having quality assurance controls to ensure third-party representatives act in line with required standards
- demonstrating how risks associated with serving customers in vulnerable situations are identified, recorded, assessed and mitigated
- identifying who is responsible for making decisions relating to customers in vulnerable situations, and then clearly reporting on these decisions
- demonstrating more clearly how pre-payment customers, who may be self-disconnecting, are identified and supported
- having more robust audit procedures to ensure high standards are achieved and maintained in these areas.
Today’s update comes on the back of robust action taken earlier this month, in which Ofgem wrote to all suppliers about the practice of remotely switching customers onto prepayment meters where it is not appropriate or safe for them- something which has shown alarming repercussions.
The definition of a ‘vulnerable situation’ in the licence is:
‘The personal circumstances and characteristics of each Domestic Customer create a situation where he or she is: (a) significantly less able than a typical Domestic Customer to protect or represent his or her interests; and/or (b) significantly more likely than a typical Domestic Customer to suffer detriment or that detriment is likely to be more substantial.’
- No Material Weaknesses: The supplier’s processes, governance and policies seem up to standard, and their data indicates they are generally achieving good consumer outcomes.
- Minor Weaknesses: Some of the supplier’s policies, processes or training could have been more comprehensive, but we did not find evidence of any significant concern.
- Moderate Weaknesses: The supplier did not have some of the policies or processes in place that we would expect, or the training and guidance available to their staff was not at the level we considered necessary. We may also have found some poor performance data.
- Severe Weaknesses: We either found that a significant proportion of the supplier’s processes and policies were missing or inadequate, or their data indicated that they are not achieving good consumer outcomes.
The Priority Services Register can offer tailored support to those customers who need extra help. Talk to your supplier or visit the Energy Aware campaign website to see if you are eligible: