Ofgem extends ban on Iresa taking on new customers

Iresa Energy is a step closer to having its supplier licence revoked as it has not managed to resolve all its customer service failings since Ofgem imposed a temporary ban in March.

The regulator has today (27 June) confirmed the provisional order, which prevents Iresa taking on new customers, requesting one-off payments and increasing direct debits, for the “foreseeable future”.

The news follows the supplier being named the worst energy company for customer service amid record complaint levels.

Citizens Advice ranked Iresa bottom of its latest energy star rating table with a score of 0.35 stars out of five for its customer service between January and March 2018.

Ofgem could revoke Iresa’s licence if the energy supplier does not meet the requirements set out in the confirmed provisional order.

Iresa was set targets by Ofgem to improve its customer service, which included extending call centre hours, improving call waiting times and responding to customer emails quicker. If these targets had been met, the temporary ban may have been lifted.

Ofgem said Iresa has “significantly reduced” its call waiting times but has “not made enough progress” in reducing the backlog of customers’ emails.

The regulator noted Iresa is also starting to “show signs of improvement” in how it handles complaints and manages its vulnerable customers. But it said, “this is not currently good enough” and it has not been sustained for a “reasonable period of time”.

Dermot Nolan, chief executive of Ofgem, said: “Iresa continues to let its customers down by failing to provide a level of service its customers deserve.

“Although it has made some improvements since we issued the provisional order in March, the supplier has been unable to meet all the requirements we set it three months ago to get its house in order.

“Ofgem will step in to protect consumers if any supplier fails to provide a satisfactory level of customer service and will take firm action against those flouting the rules, which could include a supplier’s licence being taken away.”

Iresa will have to improve in all areas for a consistent period until it can show an “acceptable level of compliance,” Ofgem said.

Alex Neill, Which? managing director of home products and services, added: “Iresa has failed to show the required improvement and the regulator is rightly preventing it inflicting further misery on new customers. But this will be of little comfort to current customers who will be deeply concerned and wanting to see evidence it is implementing long-term changes.”

Iresa is required to provide weekly reports for some aspects of the provisional order. Now it has been confirmed there is a 42-day statutory challenge period.

Once this expires, Ofgem can serve a notice to Iresa if it has not complied with the confirmed provisional order.

Utility Week understands after three months has passed from the date the notice is served, Ofgem will determine if Iresa has got its “house in order” and complied with the confirmed provisional order.

If not, the regulator will serve a second notice giving the supplier 30 days’ notice of its decision to revoke the company’s licence.

Gillian Guy, chief executive at Citizens Advice, said:“Ofgem’s decision to extend the provisional order is the correct one. Iresa’s customers have been plagued by poor customer service for too long and we are not yet seeing adequate improvements.”

Iresa is also subject to a separate longer-term investigation, by Ofgem which launched in February.

The regulator has begun a review of its approach to licensing suppliers to ensure “appropriate protections” are in place against poor customer service and financial instability.

The energy supplier, said: “Iresa are disappointed by Ofgem’s decision to give notice of their intention to extend the provisional order as we have made significant changes to improve the service we deliver to our customers.

“Our customer service team has trebled in size and our call centre is now open longer to improve our availability. This means that we have significantly reduced the queues and call waiting times previously experienced by our customers and we have improved the time it takes to resolve our customer’s issues.

“Our plan is to continue to improve our level of service across all areas, and we will continue to work with Ofgem to give them the confidence to remove the order at the earliest opportunity.

“In the meantime, we would like to apologise to our customers for any inconvenience this situation has caused, and thank them for their patience during this time.

“Iresa remains committed to providing the best quality service to its customers at low prices and as ever we will continue to ensure any concerns they have are addressed and resolved as a matter of urgency.”