Automatic compensation for energy switching issues from this week
From 1 May, customers will receive at least £30 compensation if they are mistakenly switched supplier or if suppliers are late refunding credit balance refunds.
According to an Ofgem report, energy customers would have been owed more than £70m in 2017 alone for switches that had gone wrong had automatic compensation been in place
Compensation for delayed switches and late final bills will be introduced later this year.
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.”
What will customers be entitled to?
Under the new rules, switching customers will be entitled to a maximum of £120 if their supply is not restored to the correct supplier in a timely fashion.
When a customer reports a potential “erroneous switch” (they are mistakenly switched to another supplier), they will receive £30 from each supplier if the suppliers are unable to agree within 20 working days whether an erroneous switch has occurred.
An erroneously switched customer will receive £30 from their old supplier if they fail to re-register the customer within 21 working days.
Customers will also receive a payment of £30 if a supplier fails to return a credit balance after they have switched within 10 working days of a final bill being issued.
Natalie Hitchins, head of home products and services, at Which? said: “The regulator now needs to enforce its automatic compensation standards so that energy companies get it right first time and consumers are not put off switching – given they could potentially save more than £300 a year.”