Ofgem warns energy companies Utilita and Scottish Power about failure to properly protect customers
Press release
Publication date
Company
Industry sector
Supply and Retail Market
Licence type
- Electricity Supply Licence
- Gas Supplier Licence
Ofgem has issued Provisional Orders to energy companies Utilita and Scottish Power following a series of apparent failings related to Utilita’s lack of support for vulnerable customers and Scottish Power’s debt repayment plans.
The Provisional Order for Utilita was issued on Friday 9 September 2022 and for Scottish Power was issued on Wednesday 21 September 2022. These Orders compel both companies to bring themselves into compliance with their obligations to protect customers in particular circumstances.
These two Provisional Orders come ahead of the findings of a full market review into how suppliers make sure they are supporting customers struggling with bills, due to be published by Ofgem shortly.
Cathryn Scott, Ofgem Enforcement and Emerging Issues Director said:
“These Orders to Utilita and Scottish Power are a clear signal to suppliers about the vital importance of protecting customers. The rise in cost of living is an increasingly important public issue, and we expect urgent and immediate action on the points raised, as well as constructive engagement with Ofgem during the process. Suppliers must consider a customer’s vulnerability and ability to pay to a closer degree, particularly with what is likely to be a very challenging winter for many.”
Provisional Order to Scottish Power
A review conducted by Ofgem into Scottish Power found a number of apparent failings around the way it sets debt repayment plans and deals with customers struggling with bills. Scottish Power must comply with the relevant licence conditions that govern its conduct in this area and is required to:
- Pause disconnections for those customers with active, agreed or overdue repayment plans of £5 per week (per fuel) or below.
- Review and update all call scripts, training materials, policies, communications with customers and provide training for company staff, to ensure they reflect that there is no default minimum repayment amount when sufficient information is available on a customer’s ability to pay.
- Contact and review all customers on debt repayment plans of £5 per week, per fuel, or below to ensure they are based on each customer’s ability to pay.
- Commission an independent audit of its own processes to assess whether they have been effectively implemented and provide the report to Ofgem by no later than 31 October 2022.
- Fully engage with Citizens Advice, Citizens Advice Scotland’s Extra Help Unit and Ombudsman Services to ensure all referrals and off supply incidents are reassessed in line with the service level conditions
- Continue to engage with Ofgem over the coming months to ensure compliance with the relevant Standard Licence Conditions and other provisions of the Order.
Provisional Order to Utilita
Following a review conducted by Ofgem, a number of apparent failings have been found in the way Utilita has been dealing with all customers, including vulnerable customers, customers on the Priority Services Register (PSR)1 and customers in debt. Utilita must comply with its licence conditions that govern Additional Support Credit, and ensure that pre-payment meters (PPMs) are safe and practicable for its customers.
Utilita is now required to:
- Cease the use of call scripts which tells customers that Additional Support Credit is not a licence requirement.
- Take ability to pay into account for all repayment plan calculations and on each occasion, Additional Support Credit is offered, calculate the instalments for repayment.
- Develop its Additional Support Credit policy to ensure compliance with the relevant SLCs.
By 30 September, Utilita is required to:
- Review its cases where customers have been off supply to ensure that they are offered Additional Support Credit where required and assess whether prepayment meters remain a safe payment method in each circumstance.
- Offer a credit mode meter to all PSR supply dependant customers that is safe and practicable in all circumstances of the case.
- Review and engage proactively with all PSR customers’ request for Additional Support Credit including to ensure that functionality of the prepayment meter is safe and reasonably practicable in all circumstances.
- Fully engage with Citizens Advice, Citizens Advice Scotland’s Extra Help Unit and Ombudsman Services to ensure all referral and off supply incidents are reassessed in line with the service level conditions
By no later than 4pm on 31 October, Utilita must provide Ofgem with an independent audit confirming its compliance with the other aspects of the Provisional Order.
Notes to editors
1 More information on the Priority Services Register (PSR).
- Credit mode has to be offered for customers where PPM is not safe and practicable as the PO states.
- Utilita is a company serving 775,792 electricity customers and 648,098 gas customers, all in the domestic market.
- Scottish Power serves 2,579,449 electricity customers and 1,889,365 gas customers as at 30 June 2022.
- A previous market compliance review into direct debits found that Utilita had moderate to severe weaknesses: Ofgem seeks improvements from 12 suppliers in relation to customer direct debit setting | Ofgem.