Energy customers entitled to automatic compensation for switching problems



Consumers will automatically receive compensation from today if they suffer energy switching errors or if suppliers are late in refunding credit when they leave.

Ofgem said the new requirements, which will see customers awarded at least £30 compensation, have been introduced to give customers peace of mind and boost consumer protection and confidence in the switching process..

They should also serve as a wakeup call for suppliers to reduce the number of problems and boost confidence in switching, the energy regulator added.

Compensation for delayed switches and late final bills will be introduced later this year.

For switches initiated from 1 May, customers will automatically receive compensation for so-called “erroneous switches”, where they are mistakenly switched to another supplier.

Under the new rules, customers will be entitled to compensation up to a maximum of £120 if their supply is not restored to the correct supplier in a timely fashion. Both the gaining and losing and suppliers are subject to these new guaranteed standards.

Customers will also be entitled to a £30 payment if their previous supplier is late in refunding them their credit balance after they have switched.

Under Ofgem’s rules, suppliers must refund these credit balances within 10 working days of a final bill being issued.

Suppliers are required to pay compensation automatically to the affected customer within 10 days of the breach occurring. If they fail to make the initial payment, they will be required to make a further payment of £30.

Suppliers will have to report data on payments to Ofgem which will monitor their compliance to ensure that suppliers are implementing new regulations correctly.

While the vast majority of switches go smoothly, more problems are occurring as more people switch to get a better deal.

Rob Salter-Church, director, retail systems transformation at Ofgem, said: “When a switch goes wrong, it can cause inconvenience, and in some cases, real worry and stress for those affected.

“Automatic compensation payments from 1 May, and additional payments this year, should serve as an incentive for suppliers to raise their game and get switches right first time.

“These new requirements, together with the introduction of the price cap, and tightening the rules on new suppliers entering the market, demonstrate our commitment to protecting consumers and ensuring they get a better deal.”



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