‘Urgent action’ needed to protect vulnerable customers

The energy sector needs to take “urgent action” to better identify customers in vulnerable circumstances and improve the support given to them, a report has urged.

The independent report by the Commission for Customers in Vulnerable Circumstances published today (31 May) highlights that as a whole, the sector is not consistently meeting the needs of customers.

Formed by Energy UK in February last year, the Commission exists to explore how standards of care and support could be improved across the energy industry. It consists of five commissioners from across the business, charity and consumer advice sectors.

The report found that the current performance of the sector is “inadequate and inconsistent”, adding that the Citizens Advice Extra Help Unit, which is responsible for investigating complaints linked to vulnerability, has had to double its number of caseworkers in the last five years due to the volume of issues affecting customers in vulnerable circumstances.

The report also found that the quality of support customers receive varies within companies and across the industry.

The Commission has made a number of recommendations, including roles for energy regulator Ofgem and the government.

These include:

• Creating an independently monitored code of conduct for suppliers to drive up standards of support for customers in vulnerable circumstances
• Systematic training for all frontline staff to identify and proactively offer support to vulnerable households
• Strengthening Ofgem’s licensing regime to ensure all suppliers operating in the market are equipped to support customers in vulnerable circumstances
• Industry working together to raise awareness and the effectiveness of the Priority Service Register
• Suppliers ensuring that a range of contact routes remain available to customers, including freephone numbers and paper-based communication
• Strengthening and streamlining partnerships between suppliers and charities to ensure people get access to all the help they need
• Households served by heat networks and those using fuels like LPG and heating oil getting the same regulatory protection as those using gas and electricity
• Retaining a social tariff for low-income vulnerable customers after the current default price cap ends
• The government introducing a state-funded energy efficiency scheme for England to help tackle fuel poverty, matching those already in place in Scotland and Wales

Chair of the Commission for Customers in Vulnerable Circumstances, Labour peer Larry Whitty, said: “From listening to those on the frontline, it’s very clear that there are huge variations in the way energy suppliers deal with those in need – ranging from examples of really good practice to examples of seriously insensitive treatment that fall far short of acceptable. This applies both for the established ‘big six’ and for challenger companies.

“It can’t be right that in such a highly regulated industry, it can be a matter of chance how – or if – you get the support required. That’s why our recommendations seek to make sure there is a consistent level of support across all suppliers and for all customers.

“We also cannot ignore how changes in society are leaving increasing numbers of households in difficulty, often isolated and struggling to afford the essentials. There are, therefore, wider problems that must be tackled, which we have highlighted in our report.

“But our focus has been on what the energy industry can do itself, and in commissioning this report the industry has recognised the importance and challenge of improving standards in this area.

“We now hope that they – together with government, the regulator and consumer bodies – will take the further step of putting our recommendations into practice and committing to making the support of all those in need a top priority.”

Joanna Elson, chief executive of the Money Advice Trust, who served as a member of the Commission, said: “The Commission’s report puts the energy industry firmly under the spotlight. Significant work is needed to improve support for energy customers in vulnerable circumstances.

“As the report notes, there is good practice out there, but this support is inconsistent and varies greatly across the sector.

“Training frontline staff to identify customers in vulnerable circumstances is a crucial first step, while actions such as committing to not use High Court Enforcement Officers, can also make a big difference for the most vulnerable.

“There is an important role for the third sector to play alongside suppliers through greater partnership working. This could be through signposting to debt or energy saving advice, and helping people access financial help and other essential costs.

“We look forward to building on our work with energy firms to help them put into practice the recommendations from the Commission’s report.”

Gillian Guy, chief executive of Citizens Advice, added: “It’s critical that energy customers in vulnerable circumstances get the right support at the right time, and this report rightly highlights a lack of consistency across the sector.

“We agree with the Commission that the government must protect people on heat networks just the same as any other energy consumers. Companies should be inclusive, giving customers a range of ways to contact them, including by telephone.

“We also welcome the Commission’s wider recommendations: continuing to protect vulnerable customers once the price cap is lifted and introducing a new energy efficiency scheme to tackle fuel poverty. This will help to make energy more affordable.

“There are areas where the industry and Ofgem need to go further, including preventing people on pre-payment meters from self-disconnecting.

“While smart technology will allow suppliers to better monitor pre-payment meter customers in vulnerable circumstances, this is not enough. The regulator should set clear targets for suppliers to end self-disconnection once and for all.”

Matthew Vickers, chief executive at the Energy Ombudsman, said: “This report makes some worthwhile recommendations and represents a timely and significant contribution to the debate on vulnerability in the energy sector.

“The idea of a new, independently monitored vulnerability code of conduct for energy suppliers is an interesting one and something that’s worth exploring.

“Despite the inconsistencies highlighted in this report, the energy sector as a whole is making good progress on vulnerability and there is every reason to think this can be accelerated.

“Using the experience and insight we have in the communications sector as well as energy, we hope to play a valuable role in bringing together key stakeholders, sharing cross-sector insights and facilitating better consumer outcomes.

“Internally, we are currently reviewing and updating our approach to vulnerability. Ensuring that all consumers can access our service, regardless of their circumstances, is a key priority for us.”

Stephen Murray, energy expert at MoneySuperMarket, said: “We remain committed to supporting vulnerable customers. However, the challenges are in both encouraging vulnerable customers to engage in the energy market and then identifying them to provide the support in a non-intrusive manner.

“In order for this to work, we need to make consumer engagement easier for these customers and improve the availability of data to aid information sharing between suppliers, price comparison websites and third party intermediaries.

“We welcome any opportunity to better understand the indicators of vulnerability. Our ability to support and help vulnerable customers will only be as strong as the level of information and data we receive.

“We have an existing framework in place, to ensure we meet the needs of those customers visiting MoneySuperMarket (primarily by phone) who are identified as currently vulnerable.”