UK regulator proposes automatic compensation for delays in consumer switching


UK energy regulator Ofgem has proposed to introduce a rule which will allow consumers to be paid in the event an error or delay occurs during the process of switching a supplier.

The minimum of £30 in compensation to be paid for each switching problem will also be applied in the event of delays in supply of bills and credit balance refunds to consumers who are leaving.

The new rule is expected to come into effect by the end of this year to ensure suppliers reduce the number of problems and boost consumers’ confidence in switching.

Rob Salter-Church, interim executive director of consumers and markets at Ofgem, said: “While the vast majority of switches go smoothly, too many problems are still occurring. These can cause inconvenience and in some cases, real worry and stress for those affected.

“Today’s proposals for automatic compensation will strengthen protection for consumers who switch and should serve as an incentive for suppliers to get switches right first time.”

In February, Ofgem gave an approval for utilities to upgrade their systems in a bid to ensure utilities are able to complete the consumer switch process within one working day by 2020.

Last year, 5.1 million electricity consumers and 4.1 million gas consumers in total switched supplier, the highest number for almost a decade.

Ofgem intends to introduce a price cap for all consumers on poor value default deals by the end of the year to protect them from overpaying for their energy. These consumers will be able to save even more money by switching.