Do energy suppliers treat complaints too casually?

Latest figures from Ofgem show that only a third of customers who make a complaint are happy with the response they get from their supplier. Nadine Buddoo reports.

The pressure was on water companies last month following a report from the Consumer Council for Water detailing household complaints to suppliers. Hot on the heels of this, the spotlight is now also firmly on energy suppliers in the wake of Ofgem’s bi-yearly complaints handling survey.

The key aim of the research, carried out on behalf of Ofgem by customer consultancy agency Quadrangle, is to measure complainants’ satisfaction with the way their complaint has been handled. This includes establishing the extent to which satisfaction levels have changed since the last survey in 2016, identifying the key drivers of satisfaction and dissatisfaction, and recognising evidence of good practice and areas in need of improvement.

Last month (27 September), the energy regulator revealed that in light of the report’s findings it has opened compliance cases into First Utility, Ovo Energy and Utilita about their “poor handling” of customer complaints.

All three suppliers acknowledged the report’s findings and their commitment to continually reviewing and improving their complaint handling processes. A spokesperson for First Utility said: “It’s right that Ofgem is holding the industry to account over customer service on behalf of consumers.”

Ofgem is also expanding recent compliance engagement on complaints handling performance with Scottish Power through a compliance case that includes the results of the survey.

Despite avoiding these compliance issues, the other domestic suppliers surveyed – British Gas, Npower, Utility Warehouse, SSE, EDF Energy, Eon and Co-operative Energy – will still be required to provide improvement plans on how they will deal with complaints and provide appropriate updates.

Positive performance

But the report isn’t all doom and gloom for energy suppliers. The survey of more than 3,000 complaints found that satisfaction has improved since the last survey in 2016, with 32 per cent of domestic customers satisfied with how their complaint was dealt with, an increase of 5 percentage points on 2016 (27 per cent).

Customers who lodged complaints with Npower and Scottish Power reported the greatest improvements in satisfaction compared with the last survey. Interestingly, both suppliers were the two worst performers among the largest suppliers in 2016. This improvement, according to the report, shows the impact of the concerted efforts by those suppliers to improve complainants’ experience following the regulator’s intervention in 2016.

Ofgem chief executive Dermot Nolan insisted the regulator is ready to – and will – act against those suppliers who continue to fail their customers.

“Although the level of satisfaction about complaint handling has increased over the past two years, it is still unacceptably low. Some suppliers need to be doing considerably more to get the basics right and provide a service their customers deserve,” he said.

Gillian Guy, chief executive at Citizens Advice, agreed that while some improvements have been made, energy suppliers still have a lot more work to do to when it comes to complaint handling processes.

“Customers need to have confidence that when something goes wrong, their supplier will deal with it. [This survey] shows this isn’t the case. While some improvements have been made, it’s simply not good enough that only a third of customers are happy with how their complaints are handled,” she said.

Driving satisfaction

The research showed that satisfaction was driven by professional staff encountered at the start of the complaint journey, and more consistency with getting back to complainants when agreed. This helped to reduce the information vacuum, as well as the effort complainants needed to make, to get the complaint resolved. According to the report, this treatment needs to be injected further into the process more consistently to drive satisfaction with complaint handling upwards.

Clearly, there is room for improvement, as the survey found the proportion of domestic customers who are dissatisfied (57 per cent) remains higher than those satisfied with how their complaint had been dealt with.

The main contributors to high levels of dissatisfaction were the length of time taken to resolve the issue, not being kept up to date with the progress of the complaint, and suppliers not providing complainants with a clear view of how long the resolution would take. Just under half of complaints were considered unresolved by complainants (42 per cent) and the main reason for this was the lack of communication from suppliers confirming otherwise.

The closure and impact of the complaints process also remains a thorny issue. Just over half of complainants said their complaints had been resolved (58 per cent) and reported resolution times have indeed shortened compared to 2016. But despite this, fewer than one in five complainants (18 per cent) reported receiving resolutions timings at the start of the process which matched how long the complaints ultimately took to resolve.

The research found that expectations of what complainants would receive were largely met by suppliers. Most complainants with resolved cases said they received at least a rectification of the problem. However, fewer (around one in three) received an explanation of the problem, which was something most expected to receive. In fact, those who received an explanation of the problem were more satisfied with the entire process than those who had not received an explanation. According to the report, this has become an important step for suppliers to fulfil to ensure the complainants’ expectations and needs are met.

Alternative solutions

Matthew Vickers, chief executive at the Energy Ombudsman (interviewed on p10 of this issue), believes another key step for suppliers is ensuring complainants are given more information about third-party solutions and alternative redress routes.

“Making consumers aware of their right to complain to us, or ‘signposting’ to use the jargon, is a big issue for us because we think it’s important that consumers know their rights. Consumers deserve to be made aware of their options if and when a complaint can’t be resolved.

“Ofgem’s research shows that only 15 per cent of consumers with an unresolved complaint were sent a letter by their supplier referring them to us – the same proportion as two years ago. Of the 9 per cent of survey respondents who had contacted us, less than half had received such a letter from their supplier.

“While many suppliers do a good job of signposting – there are some great examples of best practice out there – these figures are disappointing. We would like to see clear, effective signposting across the industry and are working with suppliers to highlight concerns and make improvements.”

Vickers also acknowledged that with consumers becoming more technologically savvy, suppliers must find new ways to engage with their customers.

He said: “In this digital age, it’s strange that we are still talking exclusively about letters and written notices. Consumers expect swift resolution of complaints and clear, simple communication through a channel that suits them.”

The regulator’s recommendations

Automating provision of complaint handling procedure information/making it more accessible

Having access to the complaint handling procedures would increase the likelihood that complainants are clearer on what to expect and feel a sense of transparency about the process. Automating that process, rather than having initial contact staff send it out, could make this process smoother.

A more structured approach to keeping complainants updated

Either an online system, update in writing or via SMS, or a scheduled call, depending
on contact preferences, would ensure the complainant does not feel “in the dark” about the progress of their complaint.

Formalising complaint closure by logging it only if the complainant gives their explicit permission to do so

This could help reduce the resolution gap. However, it could mean that resolution periods increase further as complainants may feel problems have not been adequately addressed. Here, closer and more rigorous adherence to complaints-handling standards would help, and would ensure the supplier seeks to resolve the issue fully the first time.

What the poor-performing companies have to say

First Utility spokesperson

“It’s right that Ofgem is holding the industry to account over customer service on behalf of consumers. Its report highlights significant improvements made in our complaints handling performance over the past two years and we look forward to reassuring Ofgem as we continue that improvement.

“The vast majority of our customers are very happy – as our numerous customer service awards support – although we recognise that there are still some areas in which we could be better. We are constantly improving and we’re one of the few providers to embrace third-party complaints resolution tools like Resolver to make it easier and more transparent for our customers.”

Ovo Energy spokesperson

“We are always open to improvements and are confident that through working with Ofgem we can continue to build on our extremely high standards and swift resolution of issues.

“We pride ourselves on great customer service and will be interested to receive the details of the customer responses from this survey, so that we can establish the reason for the scores.”

Utilita spokesperson

“Ofgem’s survey was conducted earlier this year and related to customer complaints dating back to November 2017.

“At that time we had already begun overhauling some of our processes as part of our on-going commitment to continuously monitor and improve them.

“We know we can always improve, and we will take on board any legitimate criticism. However, we are really pleased with the progress we have made this year and this has been borne out by more recent statistics from both the Energy Ombudsman and Citizens Advice.

“In fact, our complaints per 100,000 customers fell by 68 per cent between Q4 2017 and Q2 2018.”

Scottish Power spokesperson

“We are pleased the survey shows we are the most improved company for complaint handling satisfaction, but we know we still have further to go.

“We will continue to work with Ofgem as we roll out new complaint handling processes and training to further speed-up our progress. Meanwhile, our overall service levels continue to improve, as shown across a range of external surveys and scorecards.”