UK energy watchdog extends switching compensation, in supplier “wake-up” call

Households that encountered delays, mistakes to get £30 from May 1

The UK energy regulator will extend its compensation scheme for households that have encountered hitches when switching gas and electricity providers, in what it called “a wake-up call” for utility companies.

Ofgem said gas and electricity users who encountered delays or problems when switching providers would be entitled to £30 ($39, €36) in compensation from May 1.

Customers that had been switched by mistake, or whose switch had taken longer than 15 working days, or whose final bill took longer than six weeks to arrive would all be entitled to a payout from their supplier.

“(The measures) should also serve as a wake-up call for suppliers to cut out problems for customers and get switching right first time’” Ofgem said in a statement.

Under the scheme that Ofgem introduced last year, compensation payments to customers of £700,000 have already been paid out.

The UK energy market is one of the most competitive in Europe. According to Ofgem data, there were 61 energy providers in operation in Britain in the third quarter of 2019, while the number of domestic switches in the year to November 2019 was up eight per cent on the same period in 2018.

“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,” Mary Starks, executive director for Consumers and Markets at Ofgem, said.

“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,” she said.

Natalie Hitchins, Head of Home Products and Services at Which? price comparison site said switching was the best way for consumers to make savings on their energy bills, but the process remained far from seamless.

“With record numbers of people switching, this should also incentivise suppliers to get it right the first time, improve their customer service and encourage consumers to engage with a process that could save them hundreds of pounds per year,” Hitchins said.

Six energy firms have dominated the UK energy market for decades. according to Which?. British Gas, EDF Energy, Eon, Npower, SSE and Scottish Power still supply more than seven in 10 energy customers. But, according to the Which? annual energy satisfaction survey, they also rank lower than their newer rivals.

“We’ve made it easier than ever for consumers to shop around and record numbers are now switching suppliers to save on their bills’” said Minister for Energy and Clean Growth Kwasi Kwarteng. “These tough new standards will ensure switching is as smooth as possible and consumers are always protected.”

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