Gas and electricity customers who dispute their energy bills will now be able to take their complaints to a new ombudsman service.
The Energy Supply Ombudsman will have the power to resolve all customer issues related to household bills and switching energy supplier and will have the power to award customers up to £5,000 in compensation.
The introduction of the ombudsman follows an investigation by regulator Ofgem into billing last year.
The inquiry, which was prompted by a Super Complaint by consumer body energywatch, found that although there was no widespread failure of billing arrangements within the industry, when mistakes did occur they caused distress to customers, particularly the vulnerable.
Ofgem set the industry a deadline of 12 months to come up with a better way to deal with complaints over billing through self-regulation or face formal action.
All the major energy suppliers in the UK are signed up to the new ombudsman service which will be available to all households who have their electricity or gas supplied by one of the member companies.
Customers will need to try and resolve their complaint with their supplier before turning to the ombudsman.
Ofgem Chief Executive Alistair Buchanan welcomed the move.
‘I am very pleased that the industry has taken steps to put its own house in order and has risen to our challenge to deliver a better service.
‘The challenge for the industry going forward is now to work with the ombudsman to deliver an effective and well publicised service for customers. Ofgem will be closely monitoring their progress and the success of the scheme.’
Which? Principal Researcher Cassie Smith said: ‘We welcome the introduction of the ombudsman scheme. But the 12 week lag between your original complaint and being able to talk to the ombudsman is too long – all but the most stubborn of complainants will have given up by then.
‘And the move will do nothing to actually reduce the number of billing complaints. At present, bills are confusing and too often inaccurate or based on estimates. We want to see the industry tackle this problem as a priority.’