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Energy customers to get compensation for switching problems

Joanna Faith
Written By:
Joanna Faith

Energy customers switching supplier will be automatically compensated if something goes wrong, under new Ofgem proposals.

They will receive at least £30 from the supplier for each switching problem they experience.

The proposals are expected to be in place by the end of 2018.

Problems covered include being mistakenly switched to another supplier, known as an “erroneous transfer”, or switches taking longer than 21 days to complete.

Automatic payouts could also be triggered by suppliers which are late in sending final bills or refunding credit balances to customers who are leaving.

According to Ofgem research, many people are put off from switching because of worries something may go wrong.

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

Last year, 5.1 million electricity consumers and 4.1 million gas consumers switched supplier, the highest number for almost a decade.

Ofgem said the new rules would give “piece of mind to consumers” and serve as “a wake up call for suppliers” to reduce the number of problems in switching.

In February, Ofgem gave the green light to a programme to overhaul industry systems by 2020 to allow people to switch by the next working day and reduce the number of switches which go wrong.

Ofgem also intends to introduce a price cap for all consumers on poor value default deals by the end of the year to protect them from overpaying for their energy.

Rob Salter-Church, interim executive director of consumers and markets at Ofgem, said: “While the vast majority of switches go smoothly, too many problems are still occurring. These can cause inconvenience, and in some cases, real worry and stress for those affected.

“Today’s proposals for automatic compensation will strengthen protection for consumers who switch, and should serve as an incentive for suppliers to get switches right first time.”