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Energy customers to get automatic compensation for switch delays

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Written by: Paloma Kubiak
12/02/2020
Energy customers will automatically receive £30 if they experience delays or mistakes when switching supplier.

The compensation scheme will come into effect from 1 May and will be paid by the new supplier if a customer is switched by mistake, or if the switch takes longer than 15 working days.

Where a final bill doesn’t arrive within six weeks, the existing supplier will need to pay the compensation.

Energy regulator, Ofgem, said the rules should serve as a “wake-up call” for suppliers to cut out problems for customers and get switching right first time. It will also give users peace of mind that they’ll be compensated if something goes wrong.

Mary Starks, executive director for consumers and markets at Ofgem, said: “More customers are switching than ever, with a record 6.4 million changing supplier in 2019. But we also know that a minority can still experience problems when they switch.

“As part of our commitment to protecting consumers and enabling competition, we are introducing these new standards to give customers further peace of mind, and to challenge suppliers to get it right first time.

“Going forward, we will continue working with suppliers and consumer groups to deliver our programme for faster and more reliable switching and ensure these arrangements are fit for the future”.

‘Massive win for customers’

Alex Dickson, head of research at switch site Switchcraft, said the decision to move ahead with automatic compensation is a massive win for consumers, and the UK energy industry as a whole.

“New rules are a much needed warning to suppliers, whose handling of switches and customer energy accounts has dented consumer confidence. Nearly 12,000 supplier-initiated switches in 2018 were the result of either ‘misleading information’, ‘suspected fraudulent marketing’ or ‘training issues’. Suppliers now have an incentive to fix these types of problems once and for all.”

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