Cost of living: Energy suppliers failing vulnerable customers – Ofgemon November 22, 2022 at 12:01 am

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All 17 suppliers which submitted data to the regulator were told they had to improve their practices.

Woman checking thermostatImage source, Getty Images

Energy suppliers have been failing vulnerable customers, the sector’s watchdog has said, as they face a costly and cold winter.

Regulator Ofgem has ordered improvements after it found problems at all 17 firms as part of a review.

Among its findings were examples of firms setting debt repayments so high that customers decided not to top-up their pre-payment meters.

But some of the suppliers named hit back at Ofgem’s “incomplete” review.

Consumer groups described the regulator’s report as “hugely concerning” at a time when people were being hit by bills double the level of last winter and the soaring cost of living.

Criticism of specific suppliers

Ofgem said some of the worst examples of poor practice included suppliers failing to read the meters of customers who could not do so themselves.

It also found debt repayment rates set so high that vulnerable customers self-disconnected – in other words, did not top-up their prepayment meter when the credit ran out.

A pre-payment meter

Image source, Getty Images

Meanwhile, the regulator said some vulnerable customers were unable to contact their supplier to top up their meter or request support credit.

Five suppliers – Good Energy, Outfox, So Energy, Tru Energy and Utilita – were found to have “severe weaknesses” which prompted a strong response from some firms.

Meanwhile, “moderate weaknesses” were found at suppliers E (Gas & Electricity), Ecotricity, Green Energy UK, Octopus and Shell. It said that seven others had shown minor weaknesses: British Gas, Bulb, EDF, E.ON, Ovo, Scottish Power and Utility Warehouse.

Neil Lawrence, Ofgem’s director of retail. said “most suppliers” took their responsibility to protect vulnerable customers seriously and added firms had launched new initiatives – including dedicated phone lines.

But he added: “We’ve seen a number of failings across the board which need to be urgently addressed.

“It’s going to be a very challenging winter for everyone and customers must be confident they are getting the help and support they need.”

Ofgem’s third review into various aspects of suppliers’ treatment of customers comes after two earlier reports. The first demanded action on soaring direct debit demands and the second found more help was needed on payment plans for those struggling to pay.

This latest review required suppliers to give evidence about how they identified and kept records of customers in a vulnerable situation and whether they were added to a priority register for help. Suppliers also gave information about free gas safety checks and vulnerable prepayment meter customers.

All 17 suppliers which submitted data to the regulator were told they had to improve their practices.

Ofgem said in general, there were risks that people were not identified as vulnerable and given the support they were entitled to.

But questions have been raised for the regulator itself, which has been accused of being asleep at the wheel when bills are soaring and suppliers failing.

It said these reviews were a sign of how it had moved to proactive methods, rather than waiting for issues to be reported before taking action.

Household energy use graphic

To help households with higher bills, the government introduced a cap to limited price rises, meaning a typical home pays £2,500 a year for gas and electricity. However, the cap is on the unit price of energy, so those with higher usage will pay more.

This cap has been extended for 12 months from April, but will be at a higher level, so a typical household will pay £3,000 a year. Various cost-of-living payments have been announced to protect the more vulnerable, but charities and consumer groups have warned that many will still face a particularly tough time, including this winter.

Rocio Concha, from consumer group Which?, said suppliers needed to up their game to help the people on the lowest incomes.

“It is hugely concerning to see Ofgem has found that so many energy firms are falling short on the support they provide to their most vulnerable customers,” she added.

Suppliers hit back

However, Energy UK, which represents suppliers, said many firms had gone beyond what they were required to do by the regulator.

“Identifying and supporting vulnerable customers is already a top priority,” said Dhara Vyas, director of advocacy at Energy UK.

“Our members have responded swiftly to Ofgem’s review – including providing additional documentation to demonstrate where processes were already in place, and will continue to look at all the ways they can make sure people get the help and support they need.”

Some of the suppliers named as having the biggest problems were furious with Ofgem’s report.

Simon Oscroft, co-founder of So Energy, said: “Over the course of the last months and weeks, we have provided Ofgem with extensive additional information related to this review and we are disappointed that Ofgem has proceeded on the basis of incomplete information, and in a manner that may now cause vulnerable customers unnecessary concern.”

A spokesman for Utilita said: “Ofgem’s report does not represent where we are as a business today, nor does it acknowledge the significant progress we have made – and are making – since its initial assessment in early summer.”

The BBC has contacted Good Energy, Outfox and Tru Energy for comment.

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