Customers who experience issues switching supplier are set to receive automatic compensation

In a small amount of energy switches, customers can experience delays waiting for a refund or they can be transferred to a supplier in error. Ofgem has introduced new measures offering automatic compensation to customers effected in an attempt to encourage energy suppliers to get every energy transfer right, first time.

What Compensation is Available?

If a customer’s supply is not restored to the correct supplier in a timely manner, then they will be entitled to a maximum of £120.

Customers will also be entitled to a £30 payment if their previous supplier is late in refunding them their credit balance after they have switched.

Energy suppliers must refund these credit balances within 10 working days of a final bill being issued. If they don’t, then they must pay compensation to the affected customer within 10 days of the breach. If a supplier does not make the initial payment, then they are required to make a further payment of £30.

All energy suppliers will have to report data on payments to Ofgem and they will monitor their compliance to ensure that the new regulations are being followed.

Ofgem hopes that the new requirements will boost confidence in switching and give customers peace of mind that they will be compensated if something goes wrong.

Rob Salter-Church, director, retail systems transformation at Ofgem, said:

“When a switch goes wrong, it can cause inconvenience, and in some cases, real worry and stress for those affected.

Automatic compensation payments from 1 May, and additional payments this year, should serve as an incentive for suppliers to raise their game and get switches right first time.
These new requirements, together with the introduction of the price cap, and tightening the rules on new suppliers entering the market, demonstrate our commitment to protecting consumers and ensuring they get a better deal.”

Later this year, Ofgem also plans to introduce new requirements for suppliers to pay automatic compensation for delayed switches and providing late final bills.