Ofgem orders Tru Energy to improve handling of direct debits
Tru Energy has been slapped with a provisional order, compelling the supplier to take action so that its direct debit policy is fit for purpose and that customer direct debits are set at the right level.
It is now required to commission an independent audit to assess whether its direct debit processes are compliant with regulations.
The energy firm also has to review the direct debit levels of all its customers.
This follows an Ofgem investigation into the way all suppliers set their direct debits, which highlighted “severe” concerns with the energy firm.
Ofgem’s deputy director Charles Hargreaves said: “We know how hard it is for energy customers right now so it’s crucial that the amount they pay each month by direct debit, or otherwise, is right so they can manage their money. We need suppliers to step up and support their customers, especially during these very difficult times, and as regulator, we’ll be making sure they do so.”
Tru Energy is a domestic and non-domestic supplier, serving approximately 7,500 customers across the UK.
If it fails to comply with the provisional order, it risks facing further enforcement action from Ofgem.
The next market compliance review into suppliers will focus on customer service, and is expected to be published later this year.
The watchdog’s efforts to reform the energy sector come at a challenging time for consumers, with household energy bills expected to spike from already record levels to £3,500 per year this October.
There are also forecasts of £500 per month energy bills this January.
Watchdog’s review into direct debits riles criticised suppliers
Ofgem’s recent review into direct debits was criticised by several energy firms dumped in the lowest category, labelled as having “moderate or severe” issues with how they handled credit balances.
Good Energy boss Nigel Pocklington accused Ofgem of “regulation by press release” which he argued “was not very becoming of an industry body.”
Pocklington revealed Good Energy had “moderate” issues with documentation concerning direct debits – which have now been resolved.
He told City A.M.: “We fixed that within two weeks, but we have not had any acknowledgement yet. We reacted with urgency to our case, but Ofgem didn’t. So, I didn’t think the criticisms were fair. I thought it was an act of trying to find something to say.”
The renewables-only supplier was placed in the bottom group alongside Tru Energy, Utilita Energy, Ecotricity Green Energy, and the now defunct UK Energy Incubator Hub.
Utilita boss Bill Bullen – another firm with “moderate” issues – revealed he has lost confidence in Ofgem following the direct debit review.
Speaking to City PM earlier this month, he said he could no longer trust them to navigate the industry through the ensuing crisis, slamming Ofgem’s treatment of his firm as “outrageous.”
When approached for comment, a spokesperson for Ofgem said: “Ofgem works hard to make sure consumers are getting a fair deal, and as part of that we’ve been looking closely at direct debits. Our findings showed that whilst there is some excellent customer service out there, in certain areas of the market customers aren’t getting the service they need and deserve. We have made clear to some suppliers that urgent changes are now expected.”
During its reforms process, the watchdog has stated its top priority has been to protect consumers and ensure the market is fair and works for everyone