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Ensuring a fair energy deal is had by all

Ensuring a fair energy deal is had by all

Category: Gas and electricity

Updated: 10/04/2014
First Published: 10/04/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

With the 'big six' energy companies dominating the headlines – not always for the right reasons – your thoughts may turn to switching your supplier, perhaps to a smaller organisation offering competitive prices.

Often thoughts is all it amounts to though, as by the time you've looked into the rigmarole of changing supplier, you've talked yourself out of the whole idea and decide to stick with what you've got – possibly paying well over the odds.

However, the difficulty of switching supplier should soon be a thing of the past, as Ofgem continues its campaign to ensure consumers are not deterred from going after the best deals.

This week the regulator published details of its plans to complete the next stage of a programme to make switching energy suppliers faster and easier. In this stage Ofgem is looking into setting new rules aimed at stamping out cases where customers are switched by mistake, and they also intend to strengthen licence conditions for suppliers to switch customers within three weeks, after any cooling-off period.

The legal wording for these changes has been published for final consultation and the regulator wants the rules to be in force by August this year. Once in place Ofgem can then investigate, and potentially fine, companies that do not keep to the rules.

The reform of the switching process began back in December last year and Ofgem has been working in phases, with the main aims being to secure a reliable three-week switching time for consumers, halve switching timescales and challenge companies to do it as quickly as possible, and ultimately to look at longer term reforms including much faster and reliable (possibly next day) switching.

Ofgem is committed to getting a fair deal for both individuals and businesses and today they revealed how British Gas Business, a unit of British Gas, has been ordered to pay £5.6 million in fines and compensation following errors in its switching and renewals process.

Ofgem found that British Gas Business incorrectly blocked business customers from switching to other suppliers over a five-year period and also failed to give around 1,200 companies, many micro-businesses, notice that their tariffs were due to end.

Some contracts' terms and conditions legitimately prevent businesses from switching and this is also the case if money is owed on an account, but Ofgem's study found a computer error meant that around 5.6% of objections made by British Gas Business for business customers who wanted to switch between 2007 and 2012 were invalid.

The supplier has already paid nearly £1.3m to affected business customers, and will now pay a further £3.45m into an energy efficiency fund as well as an £800,000 penalty. They fully cooperated with the investigations, which resulted in their fines being lower than they potentially could have been, and they issued an apology for the errors, claiming they were working swifty to change their computer systems and had started putting in controls to stop it happening again.

Sarah Harrison, Ofgem senior partner in charge of enforcement, said: "The ability for consumers to switch easily and fairly is key to a well-functioning energy market. In these cases British Gas Business failed these consumers who were wrongly blocked from switching, many of them small businesses, and denied others the chance to switch to a better deal at the end of their contract.

"British Gas Business fully accepts its failings, has stopped the practices and corrected its processes to prevent this happening again. The company has taken responsibility for its actions and this package strikes a balance of penalty for the company and redress for affected consumers."

What next?

Compare energy tariffs to make sure you are getting a good deal.

Get the ball rolling to switch if you're paying too much.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.