Ofgem completes review of suppliers' customer service and complaints handling
Decision
Publication date
Industry sector
Supply and Retail Market
Licence type
- Electricity Supply Licence
- Gas Supplier Licence
Ofgem completes review of suppliers' customer service and complaints handling
Ofgem has undertaken a Market Compliance Review (MCR) to see how easily customers can contact their suppliers, and have any issues or complaints put right.
As part of this MCR we also sought assurance that suppliers have in place sufficient staff to maintain their service at a reasonable level of performance and have accessible information for consumers in the event of increased customer contacts.
The continued high energy prices are causing more consumers to seek help or advice from their energy supplier, and the calls made are increasingly complex. This means it is more important than ever that customers can contact their supplier to resolve issues, ask advice, or discuss their consumption or payments. Good customer service and being easy to contact is paramount, as all other services offered by suppliers depend on consumers being able to access these. We recognise that these unprecedented market conditions have presented real challenges to suppliers over recent months, and we have continued to engage with suppliers to understand the many actions being taken to support customers. Our review however identified that some suppliers’ performance does not seem to be up to the standards we expect, and in some cases has deteriorated this winter even taking account of the exceptional circumstances. Where necessary we will now require suppliers to make improvements to ensure they provide good customer service, and some suppliers are already taking action following our Market Compliance Review. This includes increasing their customer service staff teams, regular trainings on different contact channels, and improving the number and type of communications with their customers, and improvements in IT technology.
Our analysis identified several areas for improvement. This includes:
- Inadequate customer service performance, with some suppliers reporting long call wait times,
- High call drop rates, or slow responses on written customer contacts.
- Weaknesses in suppliers’ complaint processes and controls, including, incomplete communications to customers in relation to complaints.
- Incomplete management information being used to monitor performance,.
- Weaknesses in customer service agents’ training and/or quality control mechanisms.
- High rates of complaints upheld by the Ombudsman Services: Energy, suggesting poor initial complaints resolution.
Our approach to the assessments
We based our assessments on the information submitted by suppliers in response to our Request for Information for this Market Compliance Review, as well as additional data on their customer service performance between October and December 2022. In addition, we have taken into account information from other sources, such as the Ombudsman Services: Energy, Citizens Advice, and other consumer bodies. Recognising growing concerns over suppliers’ customer service towards the end of 2022, we requested additional information from supplies which demonstrated a drop in customer service performance, on average, across the market. We have seen the same in analysis done by other parties, including the Citizens Advice Star Ratings and our own Consumer Perceptions of the Energy Market survey.
All this information was taken into account when determining suppliers’ ratings, to ensure that these reflect a holistic assessment of both suppliers’ capabilities but also their realised performance.
We have already communicated the outcomes of this Market Compliance Review to suppliers, and suppliers are already making improvements as a result. As with previous Market Compliance Reviews, we have placed suppliers into one of four categories:
1.No significant issues
2.Minor weaknesses
3.Moderate weaknesses
4.Severe weaknesses
Assessment Findings
All of the suppliers we assessed had a number of areas they could improve, and so we did not categorise any supplier as ‘No significant issues’. We placed five suppliers in the ‘minor weaknesses’ category: Bulb, Ecotricity, Green Energy, Shell and Octopus. For this group of suppliers, we identified some weaknesses or gaps in their processes and that could potentially cause poor consumer outcomes, however we had no structural concerns over their customer service performance.
We placed the majority of suppliers in the ‘moderate weaknesses’ category. Suppliers in this category either had some more concerning weaknesses in their policies, processes or governance, or we considered that their current customer service performance needs to improve, or both. Examples of weaknesses in this category are gaps in training for customer service agents, more critical deficiencies in policies or processes, or long response times on some customer service channels. The suppliers in this category are British Gas, E Gas & Electricity, EDF, Good Energy, Outfox the Market, OVO, Scottish Power, SO Energy, Utilita, Utility Warehouse and Tru Energy. We have already started compliance engagement with these suppliers to address policy or process weaknesses or require concrete action plans to improve customer service performance.
In light of serious concerns about E.On’s current customer service performance, we have rated E.On ‘severe weaknesses’ and have taken the decision to immediately issue a Provisional Order requiring rapid improvements to their performance. As part of the Provisional Order, E.On will need to quickly reduce their call wait times and the rate of calls that are abandoned. E.On will have to report its customer service performance to us on a weekly basis as well. More detail on the Provisional Order can be found here.
Our expectations on suppliers
We are engaging with suppliers across the market, to drive improvements in processes to ensure customers are treated fairly, and able to contact to their supplier to get the support they need. As with the previous Market Compliance Reviews, we will periodically update this page with the progress suppliers are making to complete any required actions.