Ofgem unveils new rules to improve customer service
26th July 2023 10:59
by Myron Jobson from interactive investor
Share on
interactive investor comments on the announcement from the energy regulator.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The suite of reforms laid out by the energy regulator shines a light on the cracks in the existing framework that have prevented many customers from getting the best possible outcome amid the energy crisis.
“Ofgem has made it unequivocally clear that suppliers must do better in their support of customers.
“New rules requiring suppliers to offer more effective support for customers struggling with bills, including early intervention to identify and offer support such as temporary repayment holidays when consumers are unable to pay, are welcome.
“When people are struggling to make ends meet, they don't need additional headaches from their energy providers. They need support, guidance, and a helping hand to navigate their way through the murky waters of bills and payments. That's where good customer service comes in, serving as a beacon in the cost-of-living storm. It provides reassurance, a sense of security, and empowers customers to manage their energy usage better.
“During challenging economic times, reliable customer service can alleviate stress and create a more positive experience for customers, which is especially vital when many are facing financial hardships.
“After some flip-flopping, Ofgem has decided to press ahead with proposals to have the power to direct suppliers to ring-fence a portion of their customer credit balances when it is deemed to be in the consumer interest. This, along with the introduction of a minimum capital requirements for suppliers, will go some way in curtailing risky practices by requiring suppliers to have better control over key assets needed to operate, and hold more capital so that credit balances are better protected, ensuring that the tab isn't picked up by all customers if the supplier goes under.
“Households are back on Ofgem’s energy price cap after it fell below the £2,500 a year level, for the average household, set by the government’s energy price guarantee in July. The fall in energy costs means that household can now glimpse the light at the end of a long and winding tunnel, but the pain of elevated energy bills is far from over. The existing price cap level of £2,074 a year is up from £1,138 for the period covering 1 April 2021 to 31 October 2021. The regulator hopes that the new measures will help drive up standards before the winter.”
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.