Ofgem tells Energy Suppliers pay £30 per late switch

Ofgem has given itself new powers to keep suppliers in line by introducing automatic compensation for customers if their switch to a new energy supplier doesn’t go smoothly. Read on for the details from Selectra.

What has Ofgem promised for British energy customers?

While the switching process has never been easier, with a record 6.4 million customers changing supplier in 2019, difficulties can occasionally happen and some energy providers make more mistakes than others, impacting customer confidence in the energy industry.

To put pressure on companies to get it right the first time, every time and increase historically low consumer confidence Ofgem has decided that consumers will automatically be paid £30 in compensation if their switch is affected by mistakes or delays from the 1st of May.

Under the new changes, customers are now given a payment of £30 automatically when they are switched by mistake, no matter how quickly they are switched back to their old supplier.

Customers who have to wait more than 15 working days to be switched will also receive a payment of £30 from their new provider.

Another protection introduced by Ofgem in May also guarantees a £30 payment for switchers still waiting on a final bill from their previous company after six weeks.

What previous protections did Ofgem bring in?

The energy regulator’s new policies are phase two of a scheme rolled out in May last year when automatic compensation was introduced for customers who are wrongly switched to another supplier.

Bill-payers were given the right to receive a minimum of £30 and a maximum of £120 if they are not reconnected to the right supplier quickly enough.

Phase one of the scheme also gave consumers the right to a £30 payment if their old supplier is late in refunding their credit balance.

The changes implemented last year have already seen customers receive more than £700,000 in compensation payments. Almost three-quarters of these payments have been made in the case of late credit balance refunds, while mistaken switches account for 27% of compensated cases.

Why has Ofgem introduced these new consumer protections?

The energy watchdog said the new requirements would “serve as a wake-up call” for energy suppliers to avoid causing problems for customers by making sure the switch is done correctly from the start.

Mary Starks, executive director for consumers and markets at Ofgem, said that while more customers were switching than ever “a minority” may encounter difficulties with the process.

“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.

“Going forward, we will continue working with suppliers and consumer groups to deliver our programme for faster and more reliable switching and ensure these arrangements are fit for the future”

Ofgem seems to have their eye firmly on the ball when it comes to making the switching experience as painless as possible.