Categories
ADR Ombudsman Latest News Topical Utilities

Energy crisis – what you need to know

The full guide regarding the energy crisis

Gas prices have gone up 250% since January and 70% in the last month.

At the point of publishing, the companies Utility Point, People’s Energy,  Money Plus Energy, PFP Energy and Hub Group have ceased trading and Ofgem is arranging new suppliers for the customers of those companies. Others are in crisis talks.

Gas flame on stove

Why is there such an increase?

This has been caused by a number of factors and the Guardian article What caused the UK’s energy crisis? outlines in detail all the things that have happened to come together to cause a “perfect storm”.

  • Increase in supply from Asia particularly China and Latin America.
  • Decrease in supply from Russia.
  • Gas is normally stored in the Summer months, but the globally cold Summer meant gas supplies down.
  • 50% less wind last year so that storage is down.
  • Covid has meant more supply of gas.
  • The price cap on energy is removed on the 01/10/21

The current energy crisis is causing worry for many of us. Wholesale gas prices in the UK have more than quadrupled over the last year. Nuclear power plants have been forced to undertake unplanned outages for maintenance, a main power cable used to import electricity from France was shut down after a fire, and the UK’s wind turbines have slowed during some of the least windy months since 1961.

So, where does it leave consumers. What do you need to know?

What does Ofgem say?

A spokesperson for Ofgem said:

“We know that the current situation with high wholesale energy prices is putting pressure on customers and energy companies. This is a global issue.

We have the systems and processes in place to ensure that customer needs are always met.

For those customers who are with energy companies that can no longer trade, a new supplier will be appointed. Ofgem is working closely with government to manage the wider implications of the global gas price increase.”

What does Government say?

The Department for Business Energy and Industrial Strategy (BEIS) said that

“Ofgem has robust measures in place to ensure customers’ gas and electricity supply will continue uninterrupted if a supplier fails, however, if the appointment of a Supplier of Last Resort [a new supplier] is not possible, Ofgem and the government have agreed processes in place to appoint a special administrator to temporarily run the business until such time as a new supplier can be found.”

My supplier has gone bust – what should I do?

You are protected by the regulator, Ofgem.

It will step in and inform you of your new supplier. This is known as “supplier of last resort”. This is well named, as it may not be the best deal! But you can and should look to switch when things settle down. You should hear within a few days of your company going bust.

The new supplier will place you on a “no exit fee” tariff. Ask the supplier to put you on the cheapest tariff.

The importance of switching energy suppliers and telecom providers on ITV News

What actually happens?

 Ofgem normally invites suppliers to bid to take on the accounts of those companies that have gone into administration. This helps them get the best deal for consumers. It is slightly more difficult at the moment due to so many being at crisis point and the negotiation needed to take on debts as well as credits. This is why there is a lot of discussion around the likelihood of so many suppliers going under, as the smaller ones may not be able to take on new customers and any debt.

This process should only take a few days.

Is there any possibility of having my energy supply cut off?

No. Regardless of whether you owe money or not, Ofgem’s safety net ensures that supply will continue. You will not notice any difference other than receiving a letter from your new supplier.

Should I switch supplier now?

No. Although switching is usually a good idea and you can usually save a lot of money, there is currently too much turmoil in the sector to be sure that you are getting the best deal. Wait until things have settled down.

It is also possible that you may lock yourself into a deal and the price of wholesale gas will come down.

What’s the price cap?

Price caps on put on out-of-contract energy deals. From 01/10/21 the current price cap will be upped and will add, on average, £139 toon average to annual bills. This will be more if you have a prepayment meter or use lots of energy.

I’m in the middle of a switch – what do I do?

The switching process will continue, as normal. You will move to the new supplier. If the new supplier is one that has gone bust you will automatically be moved to the one that has taken over.

I think my supplier may go bust – what should I do?

Sit tight and wait. But do take a meter reading for your electricity and gas meters so that you know how much energy you have used.

You may not be able to access your bills if a company goes bust, so make sure you download the bill so you have the evidence.

I’m with Bulb – now what?

With 1.7million customers Bulb is too large to be taken over by another supplier. It will go into “Special Administration” with Government provides financial support until the company can be rescued, sold or closed down.

I am in credit – what will happen to my money?

The new supplier shouldn’t take any payment if you are in credit. You should also be refunded your credit. How this will be done will be explained to you by the new supplier.

I am in debt – what will happen?

You will need to pay the debt to either the old supplier’s administrators or the new supplier, depending on what deal is agreed between the old and new suppliers.

I’ve got a smart meter – what happens to me?

You will still be transferred to another supplier. However, if your new supplier cannot operate your meter in “smart” mode it will put you into a “dumb” meter mode, using your existing one. Your smart meter will work as a smart meter again if you switch to a supplier that can operate with smart meters.

What should I do about the direct debit?

The new suppliers will explain to you what will happen with your direct debit but you can cancel and set up a new one if you wish to do so.

I can’t afford the new bills – what do I do?

Notify your supplier as soon as possible as you may be able to set up a payment plan.

Look to switch as soon as you know your new supplier. Use more than one comparison website. Also look direct with the cheapest on the comparison site as they may have a deal or you could use a cashback site. See my article Do Morethan just comparison websites for insurance quotes!

If you are vulnerable you should already be on your supplier’s priority register

Ofgem provides help with links from its page Getting help if you can’t afford your energy bills. Its rules state that suppliers must work with you to help you. This includes setting up a payment plan, breaks, more time to pay, access to hardship funds and details about the Priority Register. If you are vulnerable you should be on your supplier’s list.

There may also be access to hardship funds and grants from various organisations. You may also get 60 days’ space from creditors to focus on getting debt advice and setting up a debt solution. An excellent site for Debt advice is Debt Camel.

I currently have a complaint with my supplier which has gone bust – what can I do?

Unfortunately, there is no requirement for the new supplier to resolve your complaint. However, if the issue persists with the new supplier you will need to discuss the matter with them.

If your matter is with the Energy Ombudsman, then wait for it to contact you to discuss what will happen.

I don’t know who my supplier is!

Don’t worry! You can find out your gas supplier by entering your details into Find my supplier or phoning the Meter Number Helpline on 0870 608 1524 (7 pence per minute).

You can find out your electricity supplier on the Energy Networks Association’s website. Use the Lloyds register providers list to find independent operators.

Other help regarding energy

Energy prices are up – 10 ways to keep bills down ideas to reduce your energy bills.

Electricity pylon Everything you need to know to complain about energy problems

 

 

Everything you need to know to complain about energy

 

 

 

 

A spokesperson for the Energy Ombudsman said ‘As an organisation committed to supporting consumers, small businesses and energy suppliers through dispute resolution we are acutely aware of growing concern around the future of the energy sector and the accessibility of their services. We are working closely with industry to ensure that we can provide relevant information and support to those that access our services. Ofgem’s safety net protects customers of affected companies by ensuring that their energy supply is not disrupted and that domestic customers outstanding credit balances are protected.

For customers affected by suppliers who have ceased trading, we echo Ofgem’s advice to record a meter reading and not switch suppliers before the transfer Is completed. For those who’ve registered disputes with our service, we’ll provide an update as soon as Ofgem appoint a Supplier of Last Resort (SoLR) and there is clarity around whether or not the new supplier will be in a position to help with your case.’

 

Categories
ADR Ombudsman Business Latest News

Complaining customers warm to responsive companies

Every year Ombudsman Services produces its Consumer Action Monitor. It undertakes research with consumers regarding complaints. This year it looked at the impact of Covid 19 on consumer complaining habits during March and September in 2020.

Figures released today (9 March 2021) by Ombudsman Services in its Consumer Action Report 2020 reveal that 83% of respondents agreed that a “Well-handled complaint increases my loyalty to a provider”.

Loyalty and complaint handling

10,149 consumers were asked about complaining to energy and telecom providers but it is likely that this would apply to other companies of all sizes too. Companies would do well to take heed of the findings. With it costing at least 5 times as much to gain a new customer as it does to retain one it is a very ignorant, arrogant, naïve or complacent (or mixture of any of the 4) company that does not pay attention to the value of good customer service.

From the Consumer Action Monitor 2020:

graph

A well-handled complaint is one where the customer has been shown empathy, listened to, understood, treated fairly and given a satisfactory response in a timely manner. But it is widely known that the telecom and energy sectors are the worst for doing any of these things!

During March to September 2020 consumers showed leniency and tolerance to providers, as they complained less than in the preceding year. However, the reasons for this are not fully discussed. For example, it could be that consumers were under stress in other areas and that complaining about a provider was taking a back seat.

Understanding of Alternative Dispute Resolution when needing to complain

There is a huge lack of consumer understanding about Alternative Dispute Resolution (ADR). Only 3% of consumers knew that providers had 8 weeks to resolve a complaint before it could be escalated to an ADR provider, such as an Ombudsman.

The CAM research asked consumers how long they thought companies had to resolve a complaint:

The number of respondents knowing exactly where to take a complaint was a shockingly low 25%. The lack of awareness of ADR and what is does was quite apparent.

Dispute Resolution: What it all means.

The CAM report asked consumers:

It was quite clear that consumers do not know or fully understand the time scales relating to complaints. A huge amount of work needs to be undertaken to raise the understanding of ADR for consumers. The reports Ombudsman Omnishambles and More Ombudsman Omnishambles outlined some problems with the ADR sector in the approval and monitoring of ADR providers and how the current and growing landscape is making things more confusing for consumers.

Vulnerable customers and complaining

The CAM report identified that during 2019 70% of vulnerable customers said that they would rather “suffer in silence” than complain. However, in 2020 this figure dropped. The number of those people identifying as vulnerable also decreased. The report suggests that this may be because of the support measures put in place during the pandemic. Whether these figures change once the support is removed will be interesting to see. I, for one, certainly don’t believe that it is because providers have upped their game and done the right thing in helping vulnerable customers. My 79-year-old mother was told by Sky that “no”, an engineer could not fit her new router and she should get someone to help. Bearing in mind that this was during lockdown, someone coming into the house would actually be breaching guidelines, whereas an engineer would not. Sky was clearly not supporting vulnerable customers in this case.

Green issues

Consumers showed a keen interest in green credentials and used relevant information when deciding a provider with which to contract. 65% of respondents said it was important for their energy provider to have good green credentials and 56% for telecoms. 44% of consumers said that energy and telecom providers must take green issues more seriously. There is, of course, much work to be done to ensure that the information is accurate in this area too.

The future for telecom and energy providers’ customer service

It remains to be seen if complaints from consumers will start to increase as we get through to the end of the pandemic. There could be a lot of movement in the sector as people become less tolerant or expect better deals and more redress in return for their tolerance. Certainly companies have a long way to go in improving service quality, especially for vulnerable customers. Expectations are likely to rise and providers are unlikely to improve quality in line. So, there should be more input from the regulators OFCOM and OFGEM to ensure that they do more to assist customers, especially those who are vulnerable. Consumers clearly expect resolutions to be quicker, therefore regulatory and approval bodies for ADR providers need to do more to raise standards and shorten these time scales, which were set long before emails were the norm!

It will be interesting to see how the green agenda pans out. Will it continue to grow as a factor in choosing a provider or will consumers make more economic decisions post pandemic?

One thing is for sure, energy and telecom providers need to up their game in customer service!

Further information for consumers

All you need to know about complaining to telecom providers

All you need to know to make a complaint about energy

Cover of How to Complain updated 2019 large cow logo

 

For more help, advice, tips, information and templates buy  How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results!

 

The Complaining Cow free support for businesses

It takes 5 times as much to gain a new customer to retain one. So work on turning your customers into superfans who do much of the heavy lifting for you!

Join the Facebook Group Increase Sales through Customer Service: Compassion, Care and  Integrity  A private group where you can give and get support, advice and share good practice on how to improve customer service.

Free download Customer Service 5 ways to get rave reviews & referrals a few tweaks to your customer service can help you reduce the risk to your company’s reputation, finances and impact on customers and increase sales.

Customer Service how to turn customers into superfans raving about your products/services

Customer Service: 5 ways to get rave reviews & referrals

The Complaining Cow Services

To see how The Complaining Cow can help you improve your customer service see Services.

Increase sales through exceeding expectations

 

The Complaining Cow logo, complaints, consultancy, speaker, workshops and more