Ofgem has ordered an energy retailer to take action to ensure its direct debit policies are fit for purpose, following its recent review into supplier practices.
Earlier this month Ofgem ordered suppliers to take “immediate and urgent action” after its review identified a range of weaknesses or failings in the way they charge direct debits to customers.
Of the 17 large suppliers in the domestic retail market, seven were found to have “minor” issues with their direct debit practices, whilst six were found to have “moderate to severe” flaws.
The regulator said it has “significant concerns” with London-based TruEnergy, which serves around 7,500 customers, and has issued a provisional order as a result.
Under the order, TruEnergy is compelled to commission an independent audit to assess whether its direct debit policies and processes are compliant with its regulatory requirements.
It must also review the levels of direct debit set for all customers using the payment method and make any adjustments as appropriate.
Charles Hargreaves, Ofgem’s deputy director, conduct and enforcement, consumers and markets, said: “We know how hard it is for energy customers right now so it’s crucial that the amount they pay each month by direct debit, or otherwise, is right so they can manage their money.
“Today’s enforcement action is the next step in following through on the findings from our recent review. We need suppliers to step up and support their customers, especially during these very difficult times, and as regulator, we’ll be making sure they do so.”
Meanwhile Ofgem has confirmed that its next market compliance review into suppliers will focus on customer service and will take place later this year.