Ofgem pushes for stronger powers to take action against failing suppliers

Energy regulator, Ofgem is urging the government to grant it more powers so it is better placed to take action against suppliers which fail to meet the required standards of customer service. As well as new powers, the regulator is also exploring the introduction of a consumer duty which is similar to that adopted by the Financial Conduct Authority and has outlined its ambition for energy companies to match the banking sector for customer service.

Ofgem says customer satisfaction levels fell to their lowest levels during the energy crisis and, despite recent improvement, the industry still lags behind most other sectors – and significantly behind leading sectors which currently have the best rated customer service, such as banking.   

The regulator has launched Consumer Confidence: A Step Up In Standards – Ofgem’s vision to deliver five-star customer service.

Tim Jarvis, Director General, Markets, said “Consumer trust depends on good customer service, so it is critical that energy suppliers are reliable, accurate, accessible and fair. 

“We have worked hard with suppliers to drive up standards and there are early signs that customer satisfaction is rising – but this is not enough. Our goal is to create a customer service culture that sets the highest standard for all service sectors. So today we begin the challenge of matching the high customer service scores seen in the best-ranked sectors – such as banking, retail and tourism – and we will be looking to understand what we can learn from their practices.

“We are looking at the big picture here, and it’s not just making small changes we want to see today. It’s about building a service structure capable of helping customers navigate a more complex future market, as new technology like electric vehicles and heat pumps rapidly changes the way consumers interact with their supplier.  

“We will use all the powers at our disposal and drive the improvements we want to see but do not think the market will deliver without our intervention. Where necessary, we will work with the government to create more powers to continue the transition already underway from a more reactive regulator dealing with problems as they arise to a proactive regulator, constantly striving for the best for consumers.

“Every energy consumer should have confidence that the system works in their interests and when things go wrong, they will be fixed quickly and effectively. The steps we are setting out today will bring us closer to that goal.”