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Major challenger suppliers hit by Ofgem customer service investigation

Image: Ofgem.

Image: Ofgem.

Industry regulator Ofgem has opened compliance investigations into First Utility, OVO Energy and Utilita – three of the largest energy suppliers outside of the Big Six.

It will also be expanding its existing compliance engagement with Scottish Power.

While the cases provide no implication that Ofgem has found evidence of non-compliance amongst those suppliers in particular, it will report in due course over the findings of its investigations.

Most compliance cases do not lead to any financial penalties and mainly comprise monitoring, analysis and engagement with suppliers to address particular areas of concern until they are resolved. However Ofgem has kept the door open for enforcement cases if any serious breaches are identified.

As well as launching compliance cases against those three firms, Ofgem has also required that all other domestic suppliers included in the survey – namely British Gas, Npower, Utility Warehouse, SSE, EDF, E.On and Co-operative Energy – provide improvement plans on how they to deal with complaints.

The compliance cases have been opened over suspected handling of customer complaints after Ofgem conducted its bi-yearly complaints handling survey.

It surveyed more than 3,000 complaints and found that just under a third (32%) of domestic customers were satisfied with how their complaint had been dealt with.

Whilst this was up five percentage points on the last satisfaction survey in 2016, the proportion of customers left dissatisfied with how their energy supplier has dealt with their complaints – at 57% - remains higher than those who are satisfied.

Dermot Nolan, chief executive at Ofgem, said the level of satisfaction was “unacceptably low”.

“Some suppliers need to be doing considerably more to get the basics right and provide a service their customers deserve.

“We will be monitoring the level of all suppliers’ customer service performance particularly closely after announcing proposals to introduce a price cap to protect those on poor value default deals from being overcharged.

“We are ready to – and will – act against those who fail their customers,” he said.

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