Ofgem has banned Economy Energy from taking on new customers until it resolves its customer service issues. The provisional order against the supplier also bans it from requesting one-off payments and increasing direct debits.
The ban will initially remain in place for up to three months in order for Economy Energy to take steps to:
- Improve and expand its customer contact procedures via email and webchat
- Address its billing and payment failures
- Issue customer refunds in a timely manner
If Economy Energy fails to make improvements within three months, Ofgem can confirm the provisional order to extend the ban. Ultimately, if the supplier fails to improve Ofgem can take steps to revoke its licence.
Ofgem has taken action due to the decline in the standards of Economy Energy’s customer service, complaints handling processes and standards, and billing and payment procedures.
Anthony Pygram, director of conduct and enforcement, said “Ofgem is taking action to protect customers from suffering more harm from the unacceptable level of customer service provided by Economy Energy. We expect the supplier to take immediate action to rectify its failings or face having its ban extended.”
“All suppliers are required to treat their customers fairly. Where they do not, Ofgem will take the necessary steps to ensure suppliers change their behaviour and to prevent further harm to customers.”
Gillian Guy, Chief Executive of Citizens Advice, said “Today’s action by Ofgem is a welcome and necessary step towards fixing the consistently poor service experienced by Economy Energy customers.
“We’ve raised a number of concerns in recent months about Economy Energy to the regulator. These include failing to refund customer credit balances and not properly billing people switching to a different supplier.”
“But there’s a wider problem behind this news. Ofgem’s upcoming licensing review offers a major opportunity to stop underprepared firms entering the market. Further action is needed now to address the ongoing issues caused by poorly performing companies already operating.”
Commenting on the restrictions placed on Economy Energy by Ofgem, Peter Earl, Head of Energy at comparethemarket.com, said “It’s good to see Ofgem taking a tough stance on suppliers’ poor customer service. Energy companies should not be allowed to take on new customers if they are transparently not serving their existing customers well enough. Hopefully this action from the regulator will persuade Economy Energy to significantly up its game, otherwise we could unfortunately see another supplier exit the market.”
“At the moment, it’s an unfortunate fact that household and energy bills in particular, are confusing to many people – with complicated tariff details relating to prices per unit and the bewildering world of being in credit or debit depending on consumption, being just two examples. Reform of energy billing via dramatic simplification is essential. In the meantime, however, it is absolutely vital that energy companies provide first class customer service to handle enquiries and complaints and to help customers navigate their bills and other issues.”