Exclusive: Citizens Advice urges Ofgem to clamp down on suppliers failing customers
Citizens Advice has urged Ofgem to ensure suppliers are supporting customers over the winter, including accurate energy bills and clear explanations for price hikes.
Gillian Cooper, head of energy policy for the charity, told City PM enforcement was ultimately Ofgem’s responsibility, which need to enforce regulations to protect customers now facing record energy bills.
She said: “As prices rise and we head into winter, it’s an extremely worrying time for many people. Energy companies should be supporting their customers. At the very least, people should be able to expect accurate bills from them that reflect their current usage.
“Companies must be able to explain why customers’ bills have gone up. It’s important that they’re at the end of the phone to help if needed – particularly for people who can’t get support online. Ofgem must make sure companies are doing this.”
When approached for comment, Ofgem recognised customers needed to be sure they aren’t paying more than necessary to manage their energy bills.
A spokesperson said: “Suppliers must do all they can to support customers and to recognise the significant worry and concern increased direct debits can cause.”
The watchdog carried out a market-wide review on energy suppliers’ approach to setting direct debits, which turned-up “moderate or significant issues” in a number of suppliers.
“We will continue to work with Government and suppliers on this and will not hesitate to take any further action necessary to make sure customers are treated fairly,” the spokesperson added.
Last year, Citizens Advice hammered Ofgem for failing to act against “unfit energy suppliers for nearly a decade”.
In its report on the energy crisis, the charity accused Ofgem of leaving the industry vulnerable to soaring wholesale costs – with firms failing to hedge properly against the market shock.
This saw 30 suppliers collapse, including the de-facto nationalisation of Bulb Energy, costing up to £10bn to clean up.
Ofgem pushes to clean up energy market
Ofgem has sought to clean up the energy market with fit and proper person rules, financial stress tests and temporary stabilisation charges to discourage switching.
It most recently unveiled capital adequacy requirements for energy firms – but stopped short of ringfencing rules for customer credit balances.
Last week, Business Secretary Grant Shapps wrote to the bosses of the Big Six suppliers seeking clarity over potential over-charging, with wholesale rates dropping in recent weeks amid a slide in oil and gas prices.
He wanted the energy firms to set out how their direct debit systems do not “over-estimate charging.”
Brits currently face record household energy bills of £2,500 per year, which are highly likely to climb to £3,000 per year despite vast subsidies included in the energy price guarantee.
It also follows the hospitality sector outlining its concerns to City PM last week about ultra-high energy bills.
Earlier this month, Ofgem also revealed that no supplier was handling vulnerable customers without issues – with five energy firms having severe weaknesses in their approach.
There is evidence that suppliers are seeing reduced energy consumption with Utilita and Utility Warehouse reporting drops of 15 and 10 per cent respectively since the first major price cap in April.