E refunds customers after blocking switches

E (Gas and Electricity) incorrectly blocked 361 prepayment (PPM) customers who had received discretionary credit from switching to another supplier, resulting in a compliance case with Ofgem.

The energy regulator has today (23 July) revealed that it has closed the case with E after the supplier committed to return more than £1800 in lost savings to affected customers and took steps to ensure future compliance.

Energy retailers can offer vulnerable PPM customers a discretionary credit payment to keep them on supply during times of hardship. The credit is later recovered from the customer in instalments from future energy top-ups.

As part of its response to Covid-19, E took the decision to adjust its discretionary credit process following a sharp increase in requests. Specifically, customers were asked to enter into an agreement to repay any credit value still owed to E before requesting a switch to another supplier.

In total, approximately 5,300 customers entered into the agreement between 19 March 2020 and 13 May 2020.

Standard licence conditions prohibit suppliers from preventing a proposed customer switch with the exception of specific circumstances and these protections cannot be superseded by separate arrangements between suppliers and their customers.

Once demand returned to pre Covid-19 levels in early May 2020, E voluntarily stopped requiring customers to enter into the agreement.

Ofgem engaged with the supplier to assess if customers suffered any financial detriment and E identified 361 customers who attempted to switch energy supplier while bound to the agreement. It has since agreed to credit £1,840 in total to those affected.

Furthermore, E released approximately 580 customers from the agreement who had not yet repaid the value of credit on 19 June 2020.

Ofgem said that E’s return to compliance and the refunding of customers is sufficient to end the compliance engagement.