Automatic compensation for energy switch errors

Gas and electricity customers will receive automatic compensation of £30 from May if their switch to a new provider goes wrong, Ofgem has said.

The regulator said the new rules should give “peace of mind” to those shopping around. More than six million people switched energy firms last year.

Payments will be made if the switch is not completed within 15 working days.

A mistaken switch or a failure by the old supplier to provide a final bill within six weeks will also qualify.

‘First time success’

Mary Starks, from Ofgem, said: “We are introducing these new standards to give customers further peace of mind, and to challenge suppliers to get it right first time.”

The move was described as a “welcome intervention” by David Pilling, from the Energy Ombudsman – the independent referee of unresolved disputes between customers and providers.

“Switching is now second only to billing as a source of complaints that we handle, so it’s clear that for too many people the process of changing supplier doesn’t go as smoothly as it should,” he said.

Since Ofgem introduced minimum standards last year, more than £700,000 has been paid out to customers from suppliers.

Of these payments, 27% have been for mistaken switches, while 73% have been for late credit balance refunds. This system will now be extended by making compensation payments automatic.

“Households can still save hundreds of pounds by switching and shouldn’t be put through the hassle and stress of having to claim compensation when energy suppliers make mistakes,” said Dame Gillian Guy, boss of Citizens Advice.

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BBC News – Business

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