Energy and Green Deal
Sector report 2013/14
Huge rise in energy
complaints
Maximum awards increase
to £10,000
During 2013/14 we handled 26,760 energy
complaints, 132% more than the previous year
and 67% more than we forecasted. We expect
this figure to increase significantly in the next
financial year.
During 2013/14 we required energy companies to make
financial awards in 76% of the cases we investigated.
The most common award for energy supply and
network complaints was £100. In some circumstances
we may award up to £10,000. This amount increased
from £5,000 in October 2013 in line with the small
claims court.
Energy became a central agenda item during the
Labour Party Conference in October 2013, when MPs
called for energy companies to be more transparent
for consumers. Since then, dissatisfaction with energy
companies has been a major political topic widely
publicised by the media. We have been working with
the companies and the industry regulator, Ofgem, to
ensure consumers get the best service and know what
to do if things go wrong.
Retail market review
As part of its plans to deliver a simpler, clearer and fairer
energy market, Ofgem launched a series of changes
in 2013/14. The regulator began by limiting suppliers
to offering four core tariffs per fuel (electricity and gas)
per meter type. It banned complex multi-tier tariffs and
required suppliers to structure their tariffs using only
a single unit rate. It then introduced measures to
improve interactions between suppliers and consumers.
The new rules require communications to be clear,
easy to understand and personalised. Companies must
provide details on the cheapest tariff suitable to the
individual and offer personalised cost projections.
The majority of energy consumers we hear from
complain about confusing bills and tariffs. In 2013/14,
82% of energy complaints were about billing issues,
which includes disputed charges, inaccurate invoices
and customer service. The retail market review should
go some way to combating this.
Changes in regulation
We have worked with energy companies to reinforce
standards of conduct. We welcome changes in
regulation that encourage better customer service, tariff
simplification and easier switching. We also appreciate
the training provided by the regulator, which ensures
we understand new requirements and we can make
informed decisions about whether they are being
adhered to.
Ombudsman Services
....
Piloting new ways
of working
Towards the end of 2013, Ofgem commissioned
research to understand the reasons why so few energy
consumers refer their complaints to us.
Despite the significant growth in complaints about energy
companies, only 5% of the energy consumers who could
refer their complaints to us actually do. The main issues
include: poor standard of suppliers’ communication,
lack of awareness or incorrect perception of our service,
and general complaints fatigue.
In response to this research we have been helping some
energy companies to pilot new ways of communicating
with their customers.
The future
We have been working harder to signpost consumers
to our services. We are embracing different methods
of informing consumers about our services and hope
to reach out to those in the wider society who may be
unaware there is a free, independent service available
to them.
We have begun working with combined heat and power
provider East London Energy, which operates in the
London Olympic Village. As district heating schemes,
and initiatives to provide combined heat and power
to blocks of flats or housing estates, become more
common we want to ensure that customers have the
protection of independent redress.
Energy at a glance
Total complaints resolved
Total initial contacts
How these contacts got
in touch with
Ombudsman Services
Breakdown of written contacts
Ombudsman Services
decision 44%
Pre-investigation
case closure 3%
Early resolution 3%
Total awards and remedies
Mutually acceptable
settlement 50%
Key performance indicators (KPIs)
Calls answered
in less than 2 minutes
82%
94%
Calls answered
in less than 5 minutes
Complaints received inside and outside our terms of reference
69% Outside our
terms of reference
(OTOR)
OTOR breakdown
Non
financial
only
19%
No action
5%
Correspondence
within 10 days
76%
Complaint types
your
energy
bill
89% Premature
5% Non participating
company enquiry
....
Financial
only
9%
Most common award = £100
31% Inside our
terms of reference
(ITOR)
Ombudsman Services
Both
financial
and non
financial
67%
6% General enquiries
and literature requests
£
???
82% 13% 3% 2%
Billing Transfer Sales Other
Energy and Green Deal 2013/14
Energy case studies and Green Deal
Case study: Energy broker
The consumer purchased a contract by an agent representing the participating company. The consumer
complained that the contract was mis-sold but the company maintained it was a valid contract.
We listened to the contract call and determined that the speed of delivery was so fast that it was
impossible for the consumer to have been certain what they were agreeing to. The consumer expressed
concern about the speed during the call but the agent did not slow down delivery. In the case file,
we noted that the sales agent referred to a discussion that took place before the call recording; it was
not clear what that discussion was about. We concluded that the key terms of the contract could not
be determined. The company agreed to release the customer from the contract.
Case study: Switching tariffs
The complainant used a price comparison site to check that her mother’s energy tariff was competitive.
The complainant noted that the site listed her mother’s tariff as Age UK, but that the tariff on the bills was
different. The complainant discussed this with her mother, who indicated that she had discussed switching
to the Age UK tariff some years previously. The complainant believed that the company had been billing her
mother on the wrong tariff for some years.
Our investigation found that the company and consumer had discussed a switch to Age UK. However, they
had also discussed alternative tariffs and the company placed the consumer on the most suitable tariff at
the time. The company had billed the consumer correctly using the agreed tariff. The company
was unsure why the price comparison site held incorrect information and explained that customers provide
tariff information to such websites (rather than energy suppliers). We accepted that the company was not
responsible for the incorrect information held by the price comparison site.
We found that when the complainant raised the issue with the company, they received conflicting
information and poor customer service. It was not until the complainant had contacted the company
several times that she received a clear answer to what had happened when her mother switched tariffs.
We decided that the company should provide
an apology and a goodwill gesture to acknowledge
Green Deal
poor complaint handling.
The Green Deal scheme went live in January 2013.
The scheme offers a loan to homeowners to make
energy efficiency improvements to their properties.
The idea is that the saving on energy bills pays for
the home improvement measures.
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We are the approved redress and investigation
service for the Green Deal and can handle
complaints about Green Deal providers, assessors,
installers and issues that may arise from taking
up the scheme. We envisage complaints arising
from the assessments, permissions or measure
kit used to assess a property. We can look at
whether property owners were advised correctly
and treated appropriately by Green Deal providers.
We can also consider complaints from people who
may have bought a property unaware that a Green
Deal plan is attached, as sellers must disclose this
information.