Ofgem: Suppliers have ‘non-existent’ affordability policies

Ofgem has found some energy suppliers to have “non-existent policy” relating to customers struggling to pay their bills.

The findings are part of the energy regulator’s latest Market Compliance Review which identified issues and divided suppliers into four groups – no significant issues, minor weaknesses, moderate weaknesses and severe weaknesses.

“Amongst the findings were companies with non-existent policy relating to customers in payment difficulties, a lack of management oversight in the quality of their customer engagement and a lack of adequate training materials,” Ofgem said.

Three suppliers – TruEnergy, Utilita and Scottish Power – were found to demonstrate “severe weaknesses”, with the latter two having already been issued with provisional orders.

Ofgem has also said it will work with Bulb, E Gas & Electricity, Good Energy, Green Energy UK and Outfox the Market, all of which were found to have “moderate weaknesses”.

While processes were “generally in place”, in some cases they were not adequately documented and insufficient controls and governance were in place to ensure good consumer outcomes.

“Other examples include weaknesses in processes that could lead to customers being denied support where it was required and not being offered flexible repayment arrangements when they are in payment difficulty,” Ofgem said.

Eight suppliers including Ecotricity, EDF, Eon, Octopus, Ovo, Shell, Utility Warehouse and So Energy were found to have “minor” issues.

Ofgem said it has begun working with these suppliers to help them improve in areas such as a lack of signposting to third party specialists, communications and gaps in training and policy documents.

They must also resolve issues in providing accurate data to the regulator, as well as gaps in assurance and risk management processes that could potentially impact their ability to identify risks and develop improvements. Ofgem also found these retailers may not take into account of “all relevant factors” when setting customer repayment plans.

Only one supplier, British Gas, was found to have no significant issues although Ofgem has requested some clarifications to the company’s responses.

In a letter to retailers Ofgem’s director of retail Neil Lawrence there were some “very concerning results” found in the review. Lawrence further stressed the review’s findings and set out Ofgem’s expectations on suppliers when supporting customers in payment difficulty.

Ofgem chief executive, Jonathan Brearley, said: “Although the government’s package of support will provide some welcome relief, it’s critical that, going into this tough winter, energy companies prioritise the needs of vulnerable customers struggling to pay their bills.

“We have reviewed suppliers on how they help customers who are having trouble paying their bills, particularly those who are vulnerable, and found some suppliers have fallen short of the standards Ofgem expects.

“We accept that there are many pressures on energy companies in the market this winter, but the needs of vulnerable customers must be part of their top priorities. We will now work with companies on where they can improve, and I all urge all suppliers to step up to the challenge.”

Responding to the review Energy UK’s director of advocacy, Dhara Vyas, said: “Ofgem’s report has found only minor or moderate issues with the majority of suppliers – who are now working with the regulator to address these.

“Many suppliers have been putting in extra measures to support customers over recent months and in addition to that, signatories to Energy UK’s Vulnerability Commitment have been going above and beyond their existing obligations, doing more to identify and get help to people who need it the most.

“Recent hearings with these suppliers have highlighted how they’ve sought to actively reach out and offer help, partnered with charities and consumer advice bodies to supplement the financial assistance on offer and increased training for frontline staff so that they are fully equipped to help those customers facing difficulties.”

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