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According to Ofgem, three UK energy firms have severe weaknesses in how they support customers in payment difficulties.
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.
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.
Scottish Power, Tru Energy and Utilita, the three energy firms singled out as having severe weaknesses. have been approached for comment.
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