Weak processes to support customers at risk of arrears, an inability to identify them, and lost account data have incurred the wrath of Britain’s energy regulator.
Reviewing suppliers’ protocols for handling customers in payment arrears, Ofgem finds that three – Scottish Power, Utilita and TruEnergy – show ‘severe weaknesses’ in how they support customers in difficulties.
To retain its supply licence, business-only supplier TruEnergy has already been required to undergo an independent audit.
Ofgem finds five more – E, Good Energy, Green Energy, Outfox and Bulb – have what it calls “moderate” holes in their care for customers.
Specifying instances of slipshod customer care, it had already ordered two of the worst – Scottish Power and Utilita – to clean up their act. It is now considering sanctions on others, including fines or restrictions on their supply businesses.
Eight suppliers – Ecotricity, EDF, E.ON, Octopus, OVO, Shell, UW and SO Energy – were found to have ‘minor’ issues.
Good practice in debtor support exists across the energy industry, Ofgem believes. British Gas achieved near-perfect care.
But “most” UK licencees, it concludes, fall short of their legal licence obligations through substandard processes and slack governance.
Shortcomings specified include poor agent training, weak supervisory rules, and data & algorithms lacking to pick up early clients at risk of racking up arrears. Some businesses lack processes on how to re-jig payment plans if clients hit financial troubles. Clear rules are lacking at others for escalating care of struggling bill payers.
Prioritising vulnerable customers struggling this winter to pay soaring bills is critical, says Ofgem.
Its boss Jonathan Brierley, pictured, asserted: “We accept that there are many pressures on energy companies in the market this winter, but the needs of vulnerable customers must be part of their top priorities.
“Although the government’s package of support will provide some welcome relief, it’s critical that, going into this tough winter, energy companies prioritise the needs of vulnerable customers struggling to pay their bills”.
“Backdoor disconnection tactics”
Citizens’ Advice, by law the government’s advisor on consumer debt, went further.
“Today’s review cements what struggling customers already know: some energy companies are falling drastically short of the mark”, CA’s boss dame Clare Moriarty said.
“This is utterly unacceptable given the huge cost-of-living pressures people are facing. Suppliers need to up their game and Ofgem needs to hold them to task”.
By the end of August frontline staff at Citizens Advice had supported a record-breaking total of over 15,000 people unable to top up their prepayment meter.
Dame Clare attacked the practice: ““With a tough winter ahead we must also see a ban on backdoor disconnection tactics like pushing people in debt onto prepayment meters”.
Through government cuts at Ofgem, its supervision is being weakened. In CA’s report Market Meltdown, the charity found that the number of Ofgem staff working to protect customers from poor supplier practice fell by 25% in the three years to 2021, despite record numbers of suppliers in the market.