Customers to get £30 for botched energy switch
ENERGY companies were yesterday ordered to offer automatic compensation to customers who suffer problems switching suppliers.
Industry regulator Ofgem said switching energy consumers will receive at least £30 in compensation for each difficulty they experience.
It said the payment will cover issues such as consumers being mistakenly moved to another supplier – known as an “erroneous transfer” – or switches taking longer than 21 days to complete.
Automatic payouts could also be triggered by suppliers who are late in sending final bills or in refunding credit balances to customers who are leaving.
Ofgem said the new rules would give “peace of mind” to consumers and serve as a wake-up call for suppliers to reduce the number of problems and boost consumer confidence in changing supplier to get a better deal.
Research by Ofgem has found that many people are put off switching because of concerns that something may go wrong, especially if they have experienced a problem before.
It said more problems are occurring as an increasing number of customers switch to get a more competitive energy price deal.
Last year, 5.1 million electricity consumers and 4.1 million gas consumers changed supplier, the highest number for almost a decade.
In February, Ofgem approved a programme to overhaul industry systems by 2020 to allow people to switch by the next working day. It said automatic compensation should be in place by the end of this year.
Rob Salter-Church, interim executive director of consumers and markets at Ofgem, said: “While the vast majority of switches go smoothly, too many problems are still occurring.
“These can cause inconvenience and in some cases real worry and stress for those affected.”
Consumer champion Martin Lewis, founder of MoneySavingExpert.com, said: “The idea that you shouldn’t get a final bill very late is absolutely spot on.” Mr Lewis said some people who have left an energy provider and moved on elsewhere have faced bills for hundreds of pounds anything up to a year later.
He said: “That isn’t good enough. It causes nightmarish budget problems and pushes some over the limit.
“Quite simply, after six weeks an energy company should give you your final bill, and at that point if it later decides it has got it wrong and you owe more money, it should not have a right to get it off you.
“They need to be more efficient, and if they’re not it has got to cost them.”
Industry body Energy UK said that companies were already working to respond to any problems and to deliver further improvements to make switching easier.
In a statement it said: “The overwhelming majority of switches go through without issue, with nine in 10 customers being happy with the process.”