New protection for gas and electricity customersEnergywatch replaced by new consumer champion
01 October 2008
A new process for dealing with complaints about gas and electricity suppliers comes into force today.
Suppliers have agreed to commit to a new and strict set of standards that set out how they should deal with complaints from customers and how long they have to resolve them – eight weeks for the six major suppliers and 12 weeks for smaller suppliers.
Suppliers will no longer be allowed to insist that complaints are put in writing before they can be considered. Companies will also have to publish information on the number of complaints they receive – this will help consumers to judge which companies give the best service.
Energy regulator Ofgem will have the power to fine suppliers that fail to keep to the new standards.
If a point is reached when the supplier says it has done everything it can to resolve the complaint and the customer is still not satisfied or the time limit has expired, the customer can have their complaint looked at by the Energy Ombudsman.
The Energy Ombudsman will settle disputes between suppliers and customers and has the power to award consumers up to £5,000 in compensation. The service is independent and free to use for customers. If the customer accepts the Ombudsman’s decision then the supplier must abide by it.
Under the old arrangements, customers were able to go to gas and electricity watchdog Energywatch if they had trouble resolving a complaint with their supplier, with Energywatch able to take up the complaint on their behalf.
However, the Government says that the new arrangements mean this complaint-handling service is no longer required – although vulnerable consumers, including those threatened with disconnection, will still be able to get help from new consumer body Consumer Focus.
Business Secretary John Hutton said: ‘Energy companies will have to take greater responsibility for handling complaints or face significant fines. And where complaints can't be resolved voluntarily, new redress schemes give the system teeth.’
Consumer Focus will take over Energywatch’s campaigning and lobbying role. The new organisation has been formed through the merger of the National Consumer Council, Energywatch and Postwatch.
John Hutton said: ‘These changes will help consumers get a better deal. One single body, rather than three, means a stronger voice holding business and Government to account. It means a more joined up approach to tackling problems.’
A recent survey by Which? found that gas and electricity suppliers are the worst performing of all industries when it comes to customer satisfaction. Some of the problems uncovered included inaccurate and confusing bills, poor customer service and ability to deal with customer queries, with one in five customers saying they’d had a problem with their supplier in the last 12 months.
Which? principal economist John Holmes said: ‘The new guidelines for complaint-handling are to be welcomed and we expect suppliers to comply with them.
Which? has no reason to believe that Consumer Focus will do anything other than continue the good work for consumers started by Energywatch – however we will review the new arrangements over the coming months to ensure that they are functioning well.’
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