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Are small energy suppliers as bad as the Big Six?

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01/10/2014
Last week energy regulator Ofgem sent a series of scathing letters to big and small energy suppliers alike, criticising the entire industry for poor handling of customer complaints.

According to Ofgem more than half – 57 per cent  – of consumers who complained to their energy supplier were not satisfied with how their grievance had been handled. Even worse, in nearly half of cases the energy company considered the case closed while the consumer did not.

This is the first year Ofgem included smaller companies, who have typically been touted as a cheaper and more service-oriented alternative to the ‘Big Six’, in the complaints data. The results raise the question: Are smaller energy suppliers just as bad as their bigger and more infamous counterparts?

The latest Which? energy customer satisfaction, conducted in January 2014, survey shows a slightly different picture. Overall small independent suppliers performed much better when ranked based on customer service, value for money, bill accuracy, complaints handling and helpfulness. The Big Six – British Gas, nPower, Scottish Power, SSE, Eon and EDF Energy – were predictably ranked lower than any of their independent competitors.

Ecotricity and First Utility, both smaller companies, were the only to score higher year-on-year. Ecotricity improved its customer service by five percentage points in three years while First Utility has seen an increase from 43 per cent to 58 per cent since 2011.

That being said, not all independent providers handle their complaints well. Spark Energy, which ranked tenth in the survey and scored very highly on value for money, got a single star for customer service – on par with nPower, ranked last.

Furthermore, the industry did not perform well overall. Just 20 per cent of consumers said they would trust their gas and electricity suppliers to act in their best interest.

At the time Richard Lloyd, executive director at Which?, said: “Once again the biggest energy companies have been beaten by smaller suppliers, but there are no winners in a broken market that consistently fails consumers.”

A Which? spokesperson adds: “In our energy satisfaction survey we found that smaller suppliers scored most highly. However, Ofgem’s research suggests that all suppliers, regardless of size, need to make sure their customer service and complaints handling is up to scratch.”

Archna Luthra at Money Saving Expert says that smaller suppliers have ranked amongst the best and the worst in their service polls, so there’s no reason they should be giving special treatment.

He says: “If you feel you’ve been treated shoddily, stand your ground. If your complaint hasn’t been dealt with in an acceptable way, take it to the independent ombudsman who will review it for you. Be clear about how you want to put it right and stick with your guns.”

The low customer service scores across the board shouldn’t discourage you from making the switch, Luthra says. After all, there’s still money to be saved. 

He explains: “Consumers should vote with their feet. If you’re not happy with how your supplier treats you move elsewhere. Switching can save many hundreds of pounds.”

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