Ofgem urged to do more to protect consumers as energy costs rise

Energy regulator Ofgem is been urged to do more by Citizens Advice to protect consumers as soaring energy costs drive billing issues.

Citizens Advice helped over 52,000 people with energy bill problems between January and October this year – equivalent to one person every two minutes. This is an 83% increase compared with the same period in 2020 (29,000), before the energy crisis.

Since March of this year, energy billing issues have been the single most common issue encountered by Citizens Advice Consumer Service advisers. Analysis of the charity’s data revealed that nearly a quarter (24%) of billing issues involved a shock or catch-up bill. The estimated average catch-up bill in the last year was over £2,500, compared to just under £1,700 in 2022.

Many billing issues were made worse by poor customer service: at least one in five cases had instances of poor service, such as agents failing to record important information, or customers forced to explain complex billing matters multiple times to different representatives, whilst two-thirds (67%) of people who came to us for help with a billing or meter reading issue had a disability or long-term health condition

With energy costs soaring and debt at historic highs, billing issues risk pushing people’s household budgets over the edge. Currently, suppliers can charge consumers for energy up to 12 months after it was used, meaning they have a full year to send an accurate bill (known as back-billing). This risks lumping customers with hefty, unexpected bills that they can’t afford.

Citizens Advice’s data shows a clear link between billing issues and energy debt. One in three people (34%) who sought advice about a billing issue between January and October this year were also helped with energy debt. One in five people (21%) who were helped with affordability issues were also helped with a billing problem. Addressing the billing issues that energy consumers struggle with could begin to rebuild trust in the energy market and prevent debt from escalating.

One of the ambitions of the smart meter rollout is an end estimated billing. And, while generally, people with smart meters are more satisfied with their bills than those on non-smart meters, 49% of those Citizens Advice helped with an estimated or inaccurate billing issue had a smart meter.

Citizens Advice is urging Ofgem, the regulator, to strengthen protections for consumers. The charity wants to see back-billing limited to six months for energy customers with smart meters, which would mean suppliers are incentivised to provide more timely, accurate bills.

Dame Clare Moriarty, Chief Executive of Citizens Advice, said “When you’re faced with numbers that don’t add up, it can at best be confusing, and at worst ignite financial anxiety that for some, can feel insurmountable.

“Soaring costs and historic levels of energy debt mean an unexpected or incorrect bill could be the tipping point that pushes a household’s budget from tight to completely unmanageable.

“Consumers simply can’t afford to pick up the tab when something goes wrong. Ofgem must act to protect consumers by limiting back-billing and raising service standards, so people struggling with billing issues get the help they need.”