Utility Warehouse agrees to pay £1.5 million for issues relating to customers in debt
- Utility Warehouse failed to treat some of its customers fairly and to offer services and support to those in payment difficulty in all cases
- Customers were not consistently offered services, such as debt repayment plans and energy efficiency advice, which left some of its customers disadvantaged
- Utility Warehouse will pay £1.5 million to Ofgem’s voluntary redress fund for its failings
Utility Warehouse accepts it failed to consistently treat customers fairly, which resulted in some customers being disadvantaged and facing increased financial hardship.
Ofgem, the energy regulator, was made aware of the failings following an audit report in 2018. A formal investigation was then opened which found that Utility Warehouse’s failings took place between 2013 and 2019.
The supplier did not consistently offer to put domestic customers struggling to pay their energy bills on debt repayment plans, to allow payments to be taken direct from customers’ benefits or to take into account customers’ ability to pay when calculating regular instalments as required.
Customers were not consistently offered the option of paying back charges via the voluntary installation of a pre-payment meter or offered energy efficiency advice on how to reduce their bills. In some cases, this led to the unnecessary installation of pre-payment meters under warrant.
During the course of the investigation, Utility Warehouse also raised the fact that it submitted some inaccurate Social Obligation Reporting (SOR) data to Ofgem between 2013-2019. This data allows Ofgem to review suppliers’ performance regarding their social obligations and compliance with licence requirements, challenge poor performance and inform policy decisions.
Ofgem has decided to close the investigation through alternative action after considering that Utility Warehouse has accepted its failings and put in place measures to prevent this from happening again. It has offered to pay £1.5 million into the voluntary redress fund, which supports vulnerable customers and innovation within the energy sector.
Cathryn Scott, Director of Enforcement and Emerging Issues at Ofgem, said:
“Energy suppliers are required to look after their customers, especially those in vulnerable situations. Between 2013-2019, Utility Warehouse failed to take the necessary steps to treat some customers in payment difficulty fairly, depriving them of the opportunity to manage their energy debt and ongoing energy costs.
“While the unprecedented and unexpected rise in gas and electricity prices over recent months has put energy markets under severe strain, we expect suppliers to continue to comply with their licence obligations and treat people fairly, including by providing support to vulnerable consumers. Where we see poor behaviour, Ofgem will be ready to step in and take swift action.”
Notes to editors:
- Ofgem’s investigation into Utility Warehouse was first opened in June 2018 into SLCs 27.5, 27.6(a)(i), 27.6(a)(ii), 27.6(a)(iii), 27.6(b) (services that must be offered to customers in payment difficulty), 28B (use of warrants relating to pre-payment meters and other supplier actions in relation to debt), 25C, 0 (Standards of Conduct – which in this case includes assessment of ability to pay and erroneous PPM installation under warrant) and expanded on 18/10/2019 to include SLC 32 (Social Obligations Reporting). Ofgem no longer pursues breach behaviours under SLC 27.7 and 28B. See: Investigation into Utility Warehouse’s compliance with Standard Licence Conditions
- Suppliers are required to regularly submit Social Obligations Reporting data to Ofgem in accordance with their licence. This data is necessary for suppliers to provide as monitoring and reporting form a key part of Ofgem ‘s work to protect the interests of consumers.
- The Voluntary Redress Fund provides money to charities to deliver energy related projects that support energy consumers in vulnerable situations. It also helps to deliver benefits to consumers, who were negatively impacted by the specific issue that triggered the redress payment. For more information about Ofgem’s Voluntary Redress Fund, see: Ofgem appoints Energy Saving Trust to distribute payments from rule-breaking energy companies to charities
- More information on Ofgem’s Enforcement Guidelines and Alternative Action can be found on our website.
- Alternative action is one of the enforcement tools that Ofgem can use to address ongoing concerns. Alternative action is appropriate in this case as Ofgem is satisfied that the full extent of the breach has been established and the actions taken by Utility Warehouse fully address our concerns that the breach will not recur.
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