Ofgem published a Stage 1 policy consultation on options to address priority customer service issues on 3 May 20231.
The decision document states that Ofgem received over 50 responses to its consultation, and describes the responses as mixed1. Consumer representatives were generally supportive, while some suppliers were concerned that proposals to improve contact ease were too prescriptive, too expensive, required further clarification and needed longer to be implemented1. Ofgem set out a possible costs range of around £2 to £4 per customer per year, not including any illustrative benefits it had monetised1.
The workstream began in January 2023 in response to evidence and feedback about suppliers' customer service during Winter 22/231. Ofgem cited a fall in overall domestic consumer satisfaction with supplier customer service from 74% in Q4 2018 to 66% in Q4 2022, and said recent evidence showed customer satisfaction in the energy sector was the lowest of any sector in the UK economy1.
The new licence conditions cover three areas: contact ease, support for customers struggling with bills, and publication of customer service performance information1. On contact ease, suppliers must be available via contact methods that meet customer needs, be open at times that meet customer needs, be free for customers struggling to pay, and prioritise vulnerable customers who need immediate support or their representatives1. Ofgem also introduced requirements compelling suppliers to publish information on their Citizens Advice star rating performance1.
On debt, the conditions require suppliers to be proactive and offer repayment plans at the earliest opportunity, and to give due consideration to offering temporary debt repayment holidays where appropriate1. Ofgem said repayment plans must be based on ability to pay, including considering temporary pausing of scheduled repayments when customers are unable to pay1.
"We have decided to proceed with our proposed introduction of SLC 31G.3A as set out in our statutory consultation."
Why it matters for households
The rules concern the practical terms on which a household deals with its supplier: how quickly a call is answered, whether contact is free for those in payment difficulty, and whether a repayment plan reflects what a household can actually afford1. Ofgem's decision document states that the licence condition on repayment plans relates to customers who are having or will have difficulty paying their energy bills only, following clarification of the drafting1. For a home trying to manage its energy costs without falling further behind, the conditions set expectations on how suppliers engage on debt and on how easily a customer can reach them. The decision also requires suppliers to publish their Citizens Advice star rating performance, which gives households a published measure of a supplier's customer service record1.
What happens next
Ofgem said its new rules would take effect from 8 November 2023, with the Code requirements remaining in place until that date, and that the licence changes set out in the modification notices published alongside the decision would take effect from 14 December 20231. The majority of the licence conditions go live from 14 December 2023, 56 days after the decision was published1. Ofgem also said it was keen for a voluntary industry solution to come forward in a timely manner, and that one licence requirement would only be brought into effect after consultation and with at least two months' notice1.
Sources1 cited
- Consumer standards - Decision, ofgem.gov.uk