Switching complaints to Energy Ombudsman on the rise

Switching has leapfrogged customer service as the second most frequent complaint about energy suppliers to the Energy Ombudsman, sitting behind only billing.

The Energy Ombudsman, authorised and appointed by Ofgem, resolves disputes between suppliers and their customers.

Under industry rules, a supplier has eight weeks to resolve a complaint before a consumer or small business can take their case to the Energy Ombudsman. The Ombudsman will then investigate and – if it upholds the complaint – require the supplier to take action such as issuing an apology or offering financial compensation.

The figures show that in October, November, and December of last year, switching was cited as a problem for 1.7 complaints to the Ombudsman per 100,000 customers.

This is the first time in over two years that switching was the biggest cause of non-billing complaints. Customer service complaints lagged just behind with 1.69, while billing complaints were far and away the most numerous, with 13.21.

Overall the Ombudsman received 12,310 complaints, or 24.19 per 100,000 customers. Of these, 11,566 were resolved.

These figures come to light as the energy sector prepares for the introduction of new rules that will require suppliers to automatically compensate customers if there are problems with their switch. The automatic switching compensation scheme, coming into effect on 1 May, will mean that consumers will receive at least £30 for each switching problem they experience.

Announced last June, Ofgem said that it hopes the new rules will act as a wake-up call for energy suppliers, as well as boosting the customer confidence in switching and giving them peace of mind.

Matthew Vickers, chief executive at the Energy Ombudsman, said: “Switching energy supplier can help consumers get better value for money and better customer service, so it’s important that they can have confidence in the switching process. Our data shows, however, that too often changing supplier can cause issues that take weeks to resolve and require escalation to us as the Ombudsman.

“Problems that we see include everything from customers being switched in error, to delays in refunding credit balances to departing customers. The message to suppliers is that regular switching is the new normal.

“A customer who has just left you could potentially be a customer again in future. It’s therefore good business sense to treat switching and offboarding as part of your customer journey and ensure that any complaints are dealt with quickly and to the customer’s satisfaction.

“We feel it’s essential that complaints are used to learn lessons, make improvements and raise industry standards. Suppliers shouldn’t treat automatic compensation as a business cost without addressing the underlying issues.”

Sarah Broomfield, energy expert at Uswitch, commented: “As the Energy Ombudsman has highlighted, it’s vital that energy companies, big and small, keep pace with increasing switching demand to ensure the process runs as smoothly as possible. Issues when switching are very rare, but it is vital for consumer confidence that the process is right every time. The industry is working to iron out any glitches and compensate consumers in the unlikely event something goes wrong.”

Natalie Hitchins head of home products and services at Which? added: “Switching is by far the best way for consumers to avoid rip-off energy tariffs, so it is really worrying to see such an increase in switching complaints including problems with bills and delayed refunds – which can leave customers out of pocket.

“The regulator now needs to deliver on its automatic compensation proposals so that companies have an incentive to get it right first time and consumers are not put off switching – given they could potentially save more than £300 a year.”

The latest switching figures from Energy UK published today (18 April) show a total of 625,503 switches took place in March. This represents a 29 per cent increase of the figure from the same period in 2018, and a 36 per cent increase from the 452,977 switches seen in February this year.