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Iresa banned from taking new energy customers indefinitely

Gas and electricity firm failed to fix customer service issues

Small energy company Iresa is banned from taking on new customers until ‘further notice’ and faces losing its licence if it doesn’t improve.

Energy regulator Ofgem today extended its ban on Iresa after it found that the gas and electricity supplier failed to resolve all of its customer service failings.

Iresa continues to be forbidden from asking for one-off payments and upping customers’ direct debits.

This extension follows a three-month investigation into Iresa.

Read on to find out what this means for Iresa customers. Then compare gas and electricity prices with our independent tool Which? Switch to find the best and cheapest energy company for you.

ComplaintsI’m an Iresa customer – what does this mean for me?

As Ofgem has extended a measure that’s already in place, there is no new advice for customers. If you are dissatisfied with your service from Iresa, the ban does not stop you from switching to another energy supplier.

Iresa has ‘significantly’ reduced its call-waiting times, according to Ofgem, and is ‘starting to show signs of improvement’ in how it handles complaints and manages vulnerable customers.

But there has not been enough progress in reducing its backlog of customer calls. And none of the changes have been sustained over a period of time.

The ban will remain in place until Iresa’s customer service shows ‘significant improvement’.

If Iresa continues to fail to meet Ofgem’s targets, the regulator says it will start the process of removing its licence to sell gas and electricity.

Iresa under investigation

Iresa was banned from taking on new customers in March by Ofgem. The energy regulator gave it three months to improve the service it gives to customers.

The small energy firm was also banned from increasing customers’ direct debits, and asking for one-off payments during the three-month period.

Ofgem ordered Iresa to:

  • Extend its call centre opening hours
  • Reduce the average call-waiting time to below five minutes
  • Respond to customer emails within five working days
  • Identify all vulnerable customers and offer to put them on a priority services register.

See the full list of Iresa’s customer service targets. Ofgem monitored Iresa’s progress against these.

Iresa customer service

Customers facing unexpected direct debit increases, one-off payment requests of hundreds of pounds and difficulty contacting the company were the issues that led to Ofgem investigating Iresa.

We reported on problems faced by Iresa customers back in January, shortly before the investigation begun.

Today, Ofgem announced that Iresa has still not solved its customer service problems.

At the same time, there’s still another investigation into whether Iresa broke rules about customer information and customer contact. This is examining issues around treating customers fairly, switching and debt repayments.

Choosing a gas and electricity supplier

Although you may not have heard of Iresa, it joined the energy market in 2016. It promised to deliver low prices and good service.

Many people will have joined Iresa for its competitive prices; its deals were regularly among the cheapest in 2017 – as you can see, below. The gaps in the chart are from where Iresa couldn’t take on new customers.

By late 2017, other companies offered cheaper deals.

Other people may have been tempted by its offer to pay 4.5% interest on credit balances.

Our energy satisfaction survey ranked Iresa just below the middle of our table of 31 British suppliers in September 2017. It received mixed reviews from customers, especially about its service. But since then, problems have emerged.

See the best and worst energy companies according to their customers.

Customers’ trust of energy companies is at a low point. It’s among the most distrusted sectors, with 34% of people saying they don’t trust energy companies to act in their best interest, according to our consumer trust tracker.

Only car dealers are currently more distrusted.

Which? says

Alex Neill, Which? managing director of home products and services, said: ‘Iresa has failed to show the required improvement, and the regulator is rightly preventing it inflicting further misery on new customers.

‘But this will be of little comfort to current customers, who will be deeply concerned and wanting to see evidence it is implementing long-term changes.

‘Energy customers shouldn’t put up with shoddy service, unexpected price-hikes, or failure to resolve complaints. If you are disappointed with the service that you’re getting from your current energy provider, you should look to switch to another supplier.’

Which? energy pricing research

Prices are based on a dual-fuel tariff available in all regions of England, Scotland and Wales for an average user (using Ofgem averages of 3,100kWh of electricity and 12,000kWh of gas per year), paying by monthly direct debit, with paperless bills. Data is from Energylinx. Prices given are averages across regions, rounded to the nearest whole pound and correct on 26 June 2018.

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