Ofgem’s proposals to introduce next-day switching could create a credit control problem for the industry, Green Energy UK chief executive, Doug Stewart, has warned.
Under the regulator’s proposals, changes to the current switching arrangements will allow customers to swap supplier by the end of the next working day.
Ofgem will introduce a package of reforms known as RP2a which will require the Data Communications Company (DCC) to procure a new centralised switching service (CSS) to enable fast and reliable switching.
At present, there is a mandatory 14-day cooling-off period which can allow suppliers to halt a switch if they are owed money.
Stewart told Utility Week that the new process would allow “serial switchers” to leave their supplier while owing small amounts of debt. Over time, these will build up and cause problems for retailers, he said.
“In my view the big issue is the 14-day cooling off period – do people need to switch on the same day, is 14 days that much of a problem?
“The danger is people switch away and don’t pay their bills, there is a danger people become serial switchers and fall below the radar for credit control.
“The people who switch away before settling their bill, their propensity to pay the bill diminishes.
“It’s a credit control problem for the industry.”
You can read Utility Week’s analysis on next day switching here