A 24 hour switching window has often been pitched as the holy grail for consumer engagement in energy. Many see reducing the time period between suppliers as a means to making the market more competitive, and getting more of us switching supplier as soon as we can and need to.
The previous coalition government saw Ed Davey pushing for 24 hour switching in 2013, and it seems his legacy will live on as the Department of Energy and Climate Change (DECC) has announced its renewed interest in getting the idea live by 2018, along with the smart meter roll out in 2020.
DECC wants 24 hr switching by 2018
The recently released Competition and Market Authority’s provisional report strongly suggested that, due to consumer disengagement, suppliers have been overcharging their customers without consequence
Outlining their goals to tackle some of the issues raised, the DECC released its official response to the CMA’s findings:
“We will introduce 24 hour switching in 2018 and by 2020, 53 million smart meters will be installed bringing an end to estimated billing.
“These measures will allow bill payers to know exactly what they are paying for and then use that information when comparing prices to get the best deal for them and switch to that deal faster.”
The Government will have to work with Ofgem in order for energy suppliers to take note and speed up the energy switching process which currently takes 17 days.
The biggest question around the new proposal of 24 hour switching is whether there will be a cooling off period, or whether a new system would be in place to protect customers who want to switch back whilst being committed to a true 24 hour changeover. This is something that will need to be proposed and refined by the government and Ofgem.
History of switching times
Less than a year ago it could take up to 5 weeks to switch energy supplier; this included a 14 day cooling-off period which is statutory for many services purchased over the phone or online.
At the end of 2014, switching times were cut so that switching times for energy would be 17 days including this two week period in which to change your mind and cancel. This effectively meant that switching had been cut to three days, putting suppliers on tighter reigns to switch people efficiently.
Even at the beginning on 2015 when this quicker switching time was in place, then Energy Secretary Ed Davey claimed that “the job is not done for energy suppliers. They must offer 24 hour switching for consumers as quickly as possible.”
The Conservatives have clearly kept this sentiment within the DECC, fuelling this new push for shorter times.