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Ofgem has given energy suppliers until end of October to fix their “frankly awful” complaints handling procedures.
The regulator has demanded suppliers stand accountable to their customers and explain to them what they are doing to improve their complaint handling services.
“We are already formally investigating Npower about complaint handling and other customer service issues and this should send a strong signal to all suppliers that we are ready to take action to drive up standards,” it said in a statement.
Ofgem added that “it is suppliers’ responsibility” to get complaint handling right in the first place but that there needs to be a “greater awareness” of the Energy Ombudsman which can help to resolve disputes between the companies and their customers.
The statement from Ofgem came after shadow energy secretary Caroline Flint said that more than 500,000 energy customers were potentially missing out on compensation they were owed from their suppliers.
She said that only 5 per cent of complaints were passed on to the Ombudsman because of poor standard of suppliers’ communication, a lack of awareness of the Energy Ombudsman, and general complaints fatigue.
Last month, Ofgem wrote to providers demanding action on how they handle customer complaints over bills and service following a poor showing in this year’s customer service complaints survey.
It showed 57 per cent of domestic and 52 per cent of small business consumers were not satisfied with the way their complaint had been handled by their energy supplier.
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