Credit, Collections & Insolvency News
Energy regulator Ofgem has announced a new customer compensation payment scheme to boost confidence in the switching process.
The measures will be introduced from 1st May when consumers will automatically receive £30 if they experience delays or mistakes when switching supplier
Ofgem says the new requirements, will give customers further peace of mind that they will be compensated if something goes wrong when they switch and should also serve as a wake-up call for suppliers to cut out problems for customers and get switching right first time.
Customers whose switch does not complete within 15 working days, or who are switched by a supplier by mistake, will receive the payment from the new supplier. The supplier the customer is switching away from must pay out if it fails to issue a final bill within six weeks of a switch.
Ofgem introduced the first batch of compensation payments last year, meaning suppliers must pay out if they fail to meet minimum standards around spotting and correcting mistaken switches, or refunding credit balances to customers.
Since then, customers have already received over £700,000 from suppliers. Of these payments, 27% have been for mistaken switches, while 73% have been for late credit balance refunds.
Mary Starks, executive director for Consumers and Markets at Ofgem, said “More customers are switching than ever, with a record 6.4 million changing supplier in 2019. But we also know that a minority can still experience problems when they switch.”
“As part of our commitment to protecting consumers and enabling competition, we are introducing these new standards to give customers further peace of mind, and to challenge suppliers to get it right first time.”
“Going forward, we will continue working with suppliers and consumer groups to deliver our programme for faster and more reliable switching and ensure these arrangements are fit for the future”.
Minister for Energy and Clean Growth Kwasi Kwarteng said “We’ve made it easier than ever for consumers to shop around and record numbers are now switching suppliers to save on their bills. These tough new standards will ensure switching is as smooth as possible and consumers are always protected.”
Dame Gillian Guy, Chief Executive of Citizens Advice, said: “These new protections should give more people the confidence to shop around and find the best deals. “
“Households can still save hundreds of pounds by switching and shouldn’t be put through the hassle and stress of having to claim compensation when energy suppliers make mistakes.”