Small energy supplier Solarplicity has been banned by Ofgem from taking on new customers for up to three months until it resolves customer service issues.
The regulator has warned that if the company fails to improve it could result in the revocation of its supplier licence.
Ofgem has issued a provisional order to Solarplicity, which also prevents the supplier from increasing direct debits for “vulnerable customers”.
Concerns have been raised about the company’s “poor” switching process and customer service.
Solarplicity’s performance has not been up to the required standard for “a number of months,” according to Ofgem.
The ban will remain in place for three months unless Solarplicity “significantly” improves.
Ofgem expects Solarplicity to improve customer contact channels and ensure they are managed and maintained, with queries and issues being resolved in a timely manner.
It also has instructed the company to sort out its switching process, ensure customers receive their renewal notice promptly, identify vulnerable customers and review customer accounts particularly for those in debt.
If Solarplicity fails to make improvements within three months, Ofgem can confirm the provisional order to extend the ban.
Between March 2018 and September 2018, there was an “unacceptably high” proportion of calls abandoned and unacceptably long call waiting times, Ofgem said.
While call handling has improved, the regulator has not seen the required improvements elsewhere.
Mary Starks, executive director of consumers and markets at Ofgem, said: “We have taken action against Solarplicity to protect its customers from experiencing further detriment.
“Solarplicity must get its house in order and provide a level of service that its customers expect. If not, Ofgem will take the necessary steps to ensure customers are further protected and will take the relevant action needed to do this, which may result in its licence being revoked.”
A spokesperson for Solarplicity said: “We are committed to meeting the expectations of every single Solarplicity customer, but Ofgem’s decision, which was made on old historical data, disregards the vast improvements that we have made to our customer service.”
Solarplicity said it has made “substantial additional investment” into its staff and IT systems.
The spokesperson added: “This investment has also significantly strengthened our account switching service, and the vast majority of our customers are able to switch their accounts well within the 21 day-limit.
“Ofgem’s provisional order does not cover our new flagship ‘community energy scheme’, which we have developed in partnership with social housing landlords to deliver affordable, clean energy to their tenants.
“This means we can continue rolling out this offer, which is second to none in fighting fuel poverty for thousands of customers and challenging the dominant UK energy firms.”
Ofgem has stressed the issuing of a provisional order does not imply that the regulator has found “conclusive evidence” of a breach at this stage.
Citizens Advice has welcomed the provisional order against Solarplicity. Gillian Guy, chief executive of Citizens Advice, said: “This action by the regulator was necessary to protect existing customers and prevent further problems building up.
“Solarplicity languishes at the bottom of our energy star rating league table, which assesses suppliers’ standards of customer care.
“We’ve shared our concerns about the service consumers are getting with both Solarplicity and Ofgem. It’s now up to Solarplicity to address these matters and start delivering for its customers.
“This provisional order highlights the continuing problem of struggling companies operating in the energy market. Ofgem must continue to use the powers at its disposal and take action against failing firms.”
Solarplicity scored just two stars out of five in Citizens Advice’s latest customer service rating table and ranked bottom in the annual Which? satisfaction survey published last month.
The Energy Ombudsman confirmed the supplier was subject to 1,035 investigations into complaints in 2018.
Earlier this year Ofgem banned Economy Energy from taking on new customers due to poor customer service. The supplier later ceased trading. Iresa suffered the same fate last year.