Ombudsman raises concerns over price cap messaging

The Energy Ombudsman is calling for suppliers to properly communicate the forthcoming price rises, with fears record bill increases could lead to more complaints from consumers if they are not properly understood.

Ahead of Ofgem’s price cap announcement on Friday (26 August), in which it is expected to unveil a cap of almost £3,600 for October, the Ombudsman’s director of regulatory affairs said that the service was seeing “a lot of complaints” following poor communication from retailers.

Speaking to Utility Week, Ed Dodman stressed that with record increases expected over the next few months, suppliers are going to have a “challenging but important job” to explain these to their customers.

He said: “Suppliers have a really important job to communicate with their consumers, be it why things are happening or what help is available. That’s sometimes our feedback to suppliers, have they done everything they can to make sure the consumer understands why they’ve had to do what they’ve done?

“We see a lot of complaints where it’s not necessarily been the action of the supplier, but rather that the supplier might not have explained things sufficiently to the consumer. It can leave consumers unsure about why their supplier has taken some action. The why is sometimes not explained, and that is so important in situations like this.”

Dodman further explained that in the past, when prices were relatively stable, many complaints to the Ombudsman resulted from errors in the billing process. Yet going forward, it is expecting customers to reach out to the service because they do not understand why their bill has increased so much.

He added: “If you don’t understand why your supplier has put your price up, it could affect the trust you have with your supplier. It’s going to be a challenging but important job for suppliers to explain to consumers why what they’re doing is fair in the circumstances, in order to help build and maintain the trust they have with their consumers.

“I think that’s partly because of the magnitude of changes that consumers are going to see. Most consumers won’t have seen anything like the changes in their bills that they have and are likely to see later this year.”

With the price cap already at a record £1,971, the Energy Ombudsman has seen an increase in complaints this year.

In the first half of 2022, the service received more than 38,500 complaints regarding energy suppliers, an increase of around 9% on the same period last year. Dodman explained there are likely to be several reasons for this.

He said: “First, some suppliers are struggling given all the pressures that they’re under and for some it’s becoming more difficult to resolve these complaints as efficiently as they might have done before. They are seeing more contact from consumers and more consumers in challenging circumstances, which can be difficult to support.

“Secondly, getting resolution to a complaint might be more important to a consumer than it was before. If you’ve got a dispute over a bill amount or a meter reading and it’s, say, £50, given the financial pressures people are under that might mean a lot more to you now than it did a year ago.”

In response to the concerns about communication, an Energy UK spokesperson said: “Suppliers are obviously getting a lot of calls from anxious customers at the moment, who understandably have a lot of questions about why bills are increasing so sharply.

“So they’re aware that as well as outlining the help and support on offer, they also might need to explain the wider context and things like the make-up of the bill, adjustments to direct debit payments and how the government support schemes will operate.

“That’s why we’ve worked with BEIS, Ofgem and Citizens Advice to produce a Q&A for frontline staff to help answer the questions that they are getting from callers.”

The frictions inherent in balancing net zero, security of supply and affordability are at the core of the agenda for the Utility Week Forum, on 8-9 November in London. Find out more here.