Energy watchdog Ofgem has today announced a new raft of compensation measures to protect consumers from difficulties caused by switching supplier.
From 1 May, customers will receive an automatic £30 payment from suppliers if they are switched by mistake, if their switch takes longer than 15 days, or if their final bill does not arrive within six weeks.
The new protections come after the watchdog last year introduced an initial set of payments due to customers for suppliers that fail to meet minimum standards around spotting and correcting mistaken switches, or refunding credit balances to customers.
Since these were introduced, customers have already received over £700,000 from suppliers, with 27 per cent of these for mistaken switches and 73 per cent for late credit balance refunds.
Mary Starks, executive director for consumers and markets at Ofgem, said: “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.
“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”.
Energy minister Kwasi Kwarteng said: “We’ve made it easier than ever for consumers to shop around and record numbers are now switching suppliers to save on their bills.
“These tough new standards will ensure switching is as smooth as possible and consumers are always protected.”
The Energy Ombudsman, which deals with consumer complaints, welcomed the news. David Pilling, head of policy and public affairs, said: “Switching is now second only to billing as a source of complaints that we handle, so it’s clear that for too many people the process of changing supplier doesn’t go as smoothly as it should.
“The introduction of automatic compensation is a welcome intervention by Ofgem. It offers consumers access to immediate redress and gives suppliers a financial incentive to get switches right first time”.
Peter Earl, head of energy at price comparison website comparethemarket.com, said the programme was good news for those looking to switch. He said:
“With the twenty cheapest fixed term energy tariffs currently on the market all more than £300 cheaper than the energy price cap, switching supplier is a no-brainer for consumers looking to save money.
“It is therefore vital that nobody is deterred from the switching process, which for the vast majority is a seamless process.
“Ofgem’s forthcoming compensation payments are a welcome financial safety net for consumers, and should act as a catalyst to any supplier which isn’t as quick-off-the-mark in facilitating the switching process for their customers as they should be.”