Energy customers to automatically get a £30 payout if switching suppliers goes wrong
Under the new rules, customers will get compensation if they were switched by mistake or it takes longer than 21 days to complete the move
ENERGY customers will automatically be given a payout of at least £30 if something goes wrong when switching suppliers.
The watchdog has announced the plans to tackle the rising number of problems customers have when trying to change to a cheaper deal.
Customers who are stuck on expensive variable rate deals could save as much as £491 by switching, according to uSwitch.
Last year, 5.1 million electricity consumers and 4.1 million gas consumers in total switched supplier, the highest number for almost a decade.
But Ofgem also reckons that around 900,000 of attempts went wrong.
Around 810,000 of them took longer than 21 days, while 90,000 consumers where switched by mistake.
How to switch suppliers and save £300
SWITCHING suppliers is the best way you can cut your energy bills. But recent research from MoneySuperMarket found that households are throwing away up to £300 a year by not bothering. Here's what you need to do.
1. Shop around - If you're on an expensive Standard Variable Tariff (SVT) deal you are throwing away up to £300 a year. Use a comparison site like MoneySuperMarket.com or EnergyHelpline.com to see what best deals are available to you.
The cheapest deals are usually found online and are fixed deals - meaning you'll pay a fixed amount usually for 12 months.
2. Switch - When you've found one, all you have to do is contact the new supplier.
It helps to have the following information to hand - which you can find on your bill - to give the new supplier:
- Your postcode
- Name of your existing supplier
- Name of your existing deal and how much you pay
- An up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won't be interrupted in that time.
For more advice read our guide on how to switch.
As it stands, there's a voluntary scheme where the big six energy companies have committed to pay £20 to customers who've been switched by mistake.
But for everything else, customers can apply to the firm for compensation but they are not guaranteed to get it.
Now, Ofgem has announced that customers who experience problems like mistakenly being switched to another supplier, or ones that take longer than 21 days, will automatically be compensated.
Customers will get a payout of at least £30 from the energy firm for each switching problem they experience, without the hassle of having to argue for it.
Automatic payouts could also be triggered by suppliers which are late in sending final bills or refunding credit balances to customers who are leaving.
The watchdog is also planning to introduce a price cap for all consumers on poor value default deals, to protect them from paying way over the odds for energy.
The watchdog hopes the plans will come into play at the end of the year.
Customers who've experienced problems before the new rules come into place won't be entitled to the automatic payout.
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Rob Salter-Church, interim executive director of consumers and markets at Ofgem, said: “While the vast majority of switches go smoothly, too many problems are still occurring. These can cause inconvenience, and in some cases, real worry and stress for those affected.
"Today's proposals for automatic compensation will strengthen protection for consumers who switch, and should serve as an incentive for suppliers to get switches right first time."
Richard Neudegg, from uSwitch.com has called the move a "positive step forward for energy customers".
It's been a bad year for energy customers who are battling price hikes from all big six energy companies.
More than 4.1million British Gas customers were hit with a rate rise which will see their bills rise by £60 a year.
And more than 960,000 households who get their energy from Scottish Power will see another £63 a year added on to their bills as of June 1.
It came on the same day that the National Grid, operator of the UK's gas pipeline network, issued a "gas deficit warning" as intense demand from households outstrips supply.
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