Ofgem
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Suppliers have to do more to help all their customers get a better deal
Ofgem is requiring suppliers to take part in trials to find out the best ways of helping disengaged customers get a better deal.
- Ofgem requires suppliers to trial the best ways to reach disengaged customers
- Aim is to help customers ditch uncompetitive tariffs
- Ofgem makes clear that suppliers have a special responsibility to customers in vulnerable circumstances.
The trials are one of the remedies put forward by the Competition and Markets Authority (CMA) following its energy market investigation. The CMA found that two-thirds of customers who are on standard variable tariffs are paying far more than they need to.
Ofgem is working to deliver a smarter, fairer, more competitive energy market. The CMA recommended that Ofgem lead a programme of trials to identify more effective prompts and information to help customers get more out of the market.
The rules mean that Ofgem can require suppliers to undertake trials, which will start by this summer. They will cover issues including:
- Suppliers telling customers what the cheapest deals are across the whole market
- Changing the name of standard tariffs, for example, to ‘out of contract’ tariffs
- Different ways of presenting information in domestic bills
- Changes to information customers receive once they come to the end of a fixed deal.
Rachel Fletcher, senior partner, consumers and competition said: “We must end the two- tier market where only a third of people get the best deals, while the remainder do not benefit from competition.
“By overseeing these trials, we will make sure that suppliers are doing everything they can to test ways to help these customers find better deals. This could be through switching supplier, or helping loyal customers find cheaper tariffs with the current supplier.
“As the market develops, we want to ensure that customers in vulnerable situations are not left behind. So we are making clear that suppliers have a special responsibility to these customers. We are proposing an enforceable principle for suppliers to make all efforts to identify and support them.”
In December, Ofgem published data on the number of customers on standard variable tariffs per supplier, and the gap between these tariffs and some of the cheapest in the market. This adds to transparency around this issue.
Notes to editors
- Facts and figures about switching, savings and the number of suppliers active in the market
- Yesterday Ofgem has published:
- A decision to introduce a new rule requiring suppliers to undertake trials to identify better prompts for customer switching. Several suppliers are already carrying out trials voluntarily.
- A final consultation on replacing many of the prescriptive sales and marketing rules with five enforceable principles. This is part of Ofgem’s move to regulating based more on principles so that suppliers put the needs of customers at the heart of their business. Any supplier that fails to treat its customers fairly will face tough action. The consultation also covers removing or amending some rules such as the proposed removal of the tariff comparison rate (a pence/kWh estimation of the cost of a tariff based on average consumption). Suppliers will still be required to provide information about their cheapest offers on bills. Ofgem will consult further on this in the Spring.
- A consultation on introducing a new enforceable vulnerability principle requiring suppliers to identify and respond to the needs and circumstances of vulnerable customers. See our blog: Step-change: energy customers in vulnerable situations about this today.
About Ofgem
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For facts, figures and information about Ofgem’s work, see Energy facts and figuresor visit the Ofgem Data Portal.
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