Ofgem steps in to demand suppliers improve support for vulnerable customers
Three UK energy firms have severe weaknesses in how they support customers in payment difficulties, according to Ofgem.
The regulator has demanded Scottish Power, Tru Energy and Utilita improve their help for financially vulnerable energy users – following the completion of its market compliance review into how customers with financial issues are treated by suppliers.
Ofgem has already issued provisional orders to Utilita and ScottishPower, requiring specific and urgent actions, and the regulator will also consider whether enforcement action is warranted for other suppliers.
The watchdog’s deep dive found that most energy firms needed to make improvements in processes and governance to meet their obligations.
The majority of suppliers were found to have minor or moderate issues, while only British Gas owner Centrica was found to have no significant issues.
| No significant issues | British Gas – Centrica |
| Minor issues | Ecotricity, EDF, EON, Octopus, Ovo, Shell, Utility Warehouse, SO/ESB |
| Moderate weaknesses | E, Good Energy, Green Energy, Outfox the Market, Bulb |
| Severe weaknesses | Utilita Energy, Scottish Power, Tru Energy |
It found that there were energy companies with no existing policies relating to customers in payment difficulties, alongside a lack of management oversight in customer engagement and adequate training materials.
Ofgem has argued that prioritising vulnerable customers struggling to pay their bills during this winter is critical, with household bills set to remain historically elevated despite the price cap freeze.
Jonathan Brearley, Ofgem chief executive, said: “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.”
As well as publishing the outcome of the review today, Ofgem has also sent a letter to all suppliers outlining the standards expected of them.
The next market review will look at customer vulnerability and will be published later this year.
Ofgem has been scrambling to reform the energy sector following a spike in wholesale costs that has seen both record energy bills and contributed to nearly 30 suppliers collapsing in the past 12 months.
It has brought in market stabilisation charges, financial stress tests, fit and proper person rules and is currently assessing whether to include ringfencing as a requirement for suppliers handling customer credit balances.
When approached for comment, a Scottish Power spokesperson said:“We’re disappointed that all of the effort our staff make to help our customers manage affordability challenges has resulted in this conclusion from Ofgem. We will now work with Ofgem to implement their recommendations.”
Utilita were also disappointed with their inclusion in the list.
It said: “We’re very disappointed in the conclusions Ofgem has made following its latest market compliance review, especially its decision to issue a Provisional Order rather than to engage with us. We remain in discussions with Ofgem to further explore the concerns raised.
“Our staff are deeply committed to helping customers through the cost-of-living crisis and the financial support we offer is extensive: In 2022 alone, we will provide financial assistance more than a million times to customers who need our help.”
Tru Energy has been approached for comment.