Tougher tests for new energy companies introduced – but stronger checks for existing suppliers needed says Uswitch
Tougher entry tests for new energy suppliers come into force on 5 July, designed to ensure they can finance their operations and have robust customer service plans in place.
But Richard Neudegg, Head of Regulation at Uswitch.com says the energy regulator Ofgem should be prioritising the checks and balances on existing suppliers:
“These tougher rules are long overdue, particularly as ten providers have gone bust in the last 12 months alone. But few, if any, new energy companies are expected to emerge any time soon. So why isn’t Ofgem focusing more urgently on existing suppliers – several of whom have raised eyebrows with their recent antics?
“To ensure consumers don’t lose faith in the energy industry, there needs to be a new system for triggering a review process right at the point when energy company finances or customer service become a cause for concern. Regular stress-tests for suppliers and ongoing fit-and-proper person assessments would reduce the risk of energy customers suffering poor service, or worse, seeing their provider go under.
“We also need to crack down on some of the more outlandish behaviour we’ve seen from a handful of energy companies. Some suppliers have brought their own credibility into serious doubt in the last year or so. There have been reports of providers upping direct debits without warning over winter, making unclear claims about the amount of interest they pay to accounts in credit, and even blocking customers from switching away for no good reason.
“April’s record switching levels, as households fled eye-watering price hikes of 10% or more, saw consumers showing energy companies who’s boss. Switching drives competition and innovation in the sector – so it’s crucial that bill payers can be confident that whoever they move to, every supplier is living up to high standards set by the regulator.”
FOR MORE INFORMATION
Tim Dunford
Phone: 020 3872 5612
Mobile: 07785 552666
Email: tim.dunford@uswitch.com
Twitter: @uswitchPR
Notes to editors
Domestic energy suppliers exiting the market since 2016
| Supplier | Estimated number of customers | Date ceased training | Customers transferred to | ||
|---|---|---|---|---|---|
| GB Energy | 160,000 | November 2016 | Co-operative Energy | ||
| Future Energy | 10,000 | January 2018 | Green Star Energy | ||
| GEN4U | 1,000 | July 2018 | Octopus Energy | ||
| Iresa Energy | 95,000 | July 2018 | Octopus Energy | ||
| Electraphase Energy | 20 | August 2018 | N/A | ||
| Usio Energy | 7,000 | October 2018 | First Utility | ||
| Extra Energy | 129,000 (Domestic 108,000 Business 21,000) | November 2018 | ScottishPower | ||
| Spark Energy | 290,000 | November 2018 | Ovo Energy | ||
| One Select | 36,000 | December 2018 | Together Energy | ||
| Economy Energy | 235,000 | January 2019 | Ovo | ||
| Our Power | 36,000 | January 2019 | Utilita | ||
| Brilliant Energy | 17,000 | March 2019 | SSE |
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