WIREDGOV

Around 20 per cent of British households complain to their energy provider every year, a Citizens Advice report reveals today (Thursday June 18, 2015).

The biggest source of complaints against companies is billing – which the charity estimates costs suppliers £125million a year to handle.

Today’s report, The Lost Decade, analyses measures that have been taken to improve the situation in the 10 years since the launch of a billing super-complaint.

The most basic function of an energy supplier is to manage customers’ accounts properly, the report says. Despite this, the consumer champion describes progress on billing performance as patchy.

It says poor processes are still prevalent, which has led to widespread distrust amongst consumers.

One of the main reasons for the rise in billing problems is due to difficulties that arose when some suppliers changed billing systems. These caused major customer service failures as well as delayed bills and the build-up of debts.

The Citizens Advice service helped with more than 100,000 energy related issues in the last year.  With local Citizens Advice in particular reporting a 27 per cent increase on energy problems compared to the previous year.  

Gillian Guy, Chief Executive of Citizens Advice, said: “Bad billing systems have plagued energy customers for years.

“Billing people on time, and for the right sums of money, is essential if the market is to work.  It is both astonishing and wholly unacceptable that suppliers have been getting it so wrong for so long.

“The introduction of smart meters can significantly improve consumers’ experience – the responsibility is now on suppliers to get it right and for Ofgem to bring forward new protections if things go wrong.”

Citizens Advice says the introduction of smart meters, which will be rolled out by 2020, have the biggest potential to solve many of the billing problems.

But The Lost Decade warns that unless suppliers get their own house in order this could be undermined. A key benefit of smart meters is they can eliminate estimated bills, however the report says this is reliant on suppliers having adequate systems and processes in place. 

Margaret Lynch, Chief Executive of Citizens Advice Scotland, said: “It’s been a decade since the billing super-complaint was made, yet far too many energy suppliers are still failing their customers. At a time when a scandalous 2 out of 5 households in Scotland are struggling to pay for their energy, it’s more important than ever that bills are accurate.”

The report recommends: 

• Ofgem review why the pressure of competition, and regulatory requirements, has failed to bring down billing problems. Depending on the outcome of the review, this could include introducing new incentives to make sure suppliers improve billing performance, such as harsher penalties for those who fail to provide adequate service.
• Ofgem to address the issue of complicated bills by working with customers to understand what information they need and removing unnecessary information from bills.  
• Ofgem to deliver improved protections for consumers through new regulations limiting backbilling for smart meter customers to three months.

Notes to editors

1. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. To get advice online or find your local bureau in England and Wales, visit citizensadvice.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
5. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.