Ofgem takes compliance action over energy suppliers’ complaints performance

27 Sep 2018 01:42 PM

Ofgem has opened compliance cases into First Utility, Ovo Energy and Utilita over their poor handling of customer complaints after carrying out its biyearly complaints handling survey.

Ofgem now has four compliance cases open covering complaint handling, including opening cases with First Utility, Ovo Energy and Utilita, and expanding its recent compliance engagement with ScottishPower
Seven other suppliers ordered to come up with complaint handling improvement plans
According to Ofgem’s latest complaints handling survey, while the average customer satisfaction with complaints handling has increased with the largest 11 energy suppliers surveyed, it remains unacceptably low for many

The energy regulator is also expanding recent compliance engagement on complaints handling performance with ScottishPower through a compliance case which includes the results of the survey.

As well as this new compliance action, Ofgem is also requiring all other domestic suppliers surveyed - British Gas, Npower, Utility Warehouse, SSE, EDF Energy, E.ON and Co-operative Energy - to provide improvement plans on how they will deal with complaints and provide appropriate updates.

The survey of over 3,000 complainants found that satisfaction has improved since the last survey in 2016, with a third (32%) of domestic customers satisfied with how their complaint was dealt with, an increase of five percentage points from 2016 (27%).

However, the survey found that the proportion of customers who are dissatisfied (57%) remains higher than those satisfied with how their complaint had been dealt with.

The main contributors to high levels of dissatisfaction were the length of time taken to resolve the issue, not being kept up to date with the progress of the complaint and suppliers not providing complainants with a clear view of how long the resolution will take.

Dermot Nolan, chief executive of Ofgem, said:

“Although the level of satisfaction about complaint handling has increased over the past two years, it is still unacceptably low. Some suppliers need to be doing considerably more to get the basics right and provide a service their customers deserve.

“We will be monitoring the level of all suppliers’ customer service performance particularly closely after announcing proposals to introduce a price cap to protect those on poor value default deals from being overcharged.

“We are ready to – and will – act against those who fail their customers.”

The opening of these compliance cases does not imply that Ofgem has made any findings about non-compliance by the suppliers. Ofgem will report in due course on the findings of its compliance engagement.

Notes to editors

Ofgem’s biyearly complaints handling survey has been published today.
Complaints received by all suppliers per 100,000 customer accounts (GB) has almost halved since Q2 2014, although there has been a small increase over the last six months.
Energy consumers looking to switch supplier can visit Citizens Advice’s free to use energy star rating performance table, which ranks energy suppliers on their complaints handling to help make decisions about switching.
Quadrangle, an independent market research company, carried out the survey on Ofgem’s behalf. The research was carried out in February to April 2018, with 3,080 domestic and 703 micro-business complainants who had lodged complaints with their supplier in late 2017.
Research participants were complainants of the following:

The six largest domestic and micro-business suppliers: British Gas, SSE, EDF, E.ON, ScottishPower and npower; and
The largest of the medium-sized suppliers: First Utility, Utility Warehouse, OVO Energy, Utilita and Co-op Energy (domestic complainants only), as well as Opus (micro-business complainants only)

Ofgem’s Enforcement Guidelines sets out a number of criteria that it can consider when deciding whether it’s appropriate to take formal or alternative action to resolve an issue:

Compliance engagement includes monitoring, analysis and engagement with suppliers to address risks to good consumer outcomes, or until an issue is resolved, generally without proceeding to formal investigation. The majority of compliance cases do not lead to any monetary consequences, but instead result in changes to supplier behaviour.
When potential breaches are serious, or indicate repeated poor compliance, or where a supplier is unwilling or unable to cooperate with our compliance team in putting matters right, Ofgem is more likely to open an enforcement case, which could end with a finding of breach and the supplier paying a financial penalty.

Ofgem collects, regularly updates and publishes the latest complaints information on its data portal.
As of the 28 August 2018, it is mandatory for all suppliers to submit to Ofgem information on the complaints they receive from their domestic and microbusiness customers – note that the information is not just about number of complaints but is also type of complaints, speed of resolution, channel, etc.

Further information

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