Energy retailers to pay higher levels of compensation for failing customers

Energy retailers will have to pay out more money to customers for failing to meet the Guaranteed Standards of Performance (GSoP) set out by Ofgem.

The regulator has announced its intention to increase compensation payments from £30 to £40 to reflect inflation levels.

The GSoPs cover eight points, including switching times, replacing faulty meters and keeping to appointments (see full list below).

Beth Martin, director of consumer protection and competition at Ofgem, said: “We’re working hard to drive up standards in the energy sector, and have introduced a series of reforms to make sure energy companies are doing everything they can to support their customers.

“The guaranteed standards of performance were brought in to make sure consumers get the service they deserve from their energy supplier, but we know things do go wrong from time to time. When that happens, consumers should be compensated fairly.

“With the cost of living increasing across the board, it’s right that we look again at the payment level to make sure this reflects inflation. ”

Last year the regulator ordered three suppliers – Eon, Good Energy and Octopus – to pay a total of £8 million in compensation and redress after failing to meet the GSoP related to billing, and timely compensation payments.

The current GOSPs were introduced in 2015, with the £30 payment level set at the same time.

Further standards in relation to switching suppliers were added in 2019 and 2020.

The full list of minimum standards suppliers must meet, or pay compensation if they do not, under the GSoP include:

• Making and keeping appointments for home/microbusiness visits
• Investigating and fixing/replacing faulty credit meters
• Investigating and fixing/replacing faulty prepayment meters
• Reconnection following a disconnection due to debt
• Completing a customer’s switch to a new supplier within five working days
• Avoiding, investigating and reversing any erroneous transfer of a customer to a new supplier
• Provision of a final bill within six weeks of a customer switching supplier
• Refund of a customer’s outstanding credit balance within 10 working days of providing a final bill to switched customer

Last month, Ofgem also introduced faster compensation payments when a supplier fails to complete a customer switch.

The regulator also introduced a number of new rules last December, including the requirement to prioritise enquiries from vulnerable customers, and proactively offer support to those who may be struggling to make payments.