Ofgem has published a list of poor behaviours by non-domestic energy suppliers, including instances of customers being threatened with disconnection if they did not pay off a previous tenant’s energy debt.
The energy regulator has published a draft update to standards of conduct supply licence condition in which it is proposing to add in examples of poor supplier practice which it has drawn mainly from its enforcement and compliance work.
While this list is not exhaustive, the regulator said, it is intended to help non-domestic energy retailers understand what is expected of them.
The standards of conduct require the licensee to behave and carry out any actions in a “fair, honest, transparent, appropriate, and professional manner”.
Yet Ofgem has described the poor treatment faced by some in relation to a previous customers’ debt.
It says: “Customers in new premises going through lengthy change of tenancy processes were simultaneously threatened with disconnection if they did not pay off the debt from the previous tenant.
“These circumstances were aggravated by the change of tenancy process being protracted due to delays by the supplier and requests for documents a new tenant could not be reasonably expected to hold, while at the same time the supplier did not delay pushing ahead with threats of disconnection if outstanding debt from the previous tenant was not paid.”
Further examples of poor practice concern customer communications failings around terms attached to fixed term contracts.
The regulator revealed that some customers had signed contracts with a supplier believing that they had been sold a fixed price contract, only to later see their bills increase.
It adds: “When they asked their supplier, the supplier pointed out that there was a clause deep within the contract that allowed them to increase prices in certain circumstances.
“The principal terms of contract relating to charges had not been made sufficiently clear to the customer before they signed up to the deal.”
Alongside the draft guidance Ofgem’s director general of markets Tim Jarvis has written a letter to both non-domestic suppliers and consumer groups about the issue.
“More broadly, as we get closer to winter it will be critical we can clearly establish the facts of consumers’ and suppliers’ experience to quickly and effectively resolve any challenges. We will continue to work closely with suppliers, consumers and government to enhance our monitoring and intelligence for the non-domestic market, to ensure we have early sight of any areas of concern,” Jarvis said.
Earlier this year Ofgem called on the government to approve more powers to regulate third party intermediaries (TPIs) such as energy brokers as part of its review into the non-domestic retail market.
Previously Ofgem introduced rules requiring suppliers securing microbusiness consumer contracts through brokers to only work with energy brokers who are part of a qualifying redress scheme. The regulator has since proposed to expand this licence condition to include all businesses.
Other recommendations to government include expanding access to the Energy Ombudsman to all businesses and the regulator is also calling for further consideration for vulnerable domestic consumers on non-domestic contracts, such as people who live in care homes, social housing and in mobile home parks, who are at risk of missing out on protections.
As well as TPI dispute resolution, the regulator is also consulting on requiring suppliers to provide “timely responses” to complaints and “stepped-up reporting to Ofgem on complaint handling”. It is further proposing to widen the standards of conduct rules that currently only apply to microbusinesses.
“We have worked closely with suppliers and customer groups and welcome engagement with our non-domestic market review. Following our summer consultation, we will soon publish a statutory consultation to take forward certain licence changes,” Jarvis’ letter states.