- Currently, companies have eight weeks to respond to requests
- The proposals aims to make compensation fairer, quicker and easier
- The proposals are being delivered as part of the government’s Plan for Change
The government has put forward new measures that it says will protect consumers against energy price rises, including cutting the time it takes to get compensation from energy companies.
The current system of the automatic compensation schemes for when things go wrong makes it “too difficult” for consumers to access “proper” compensation, the government said.
Currently, companies have eight weeks to respond to requests, and if they do not respond or complaints go unresolved, then the onus is on consumers themselves to self-refer to the Energy Ombudsman.
Miatta Fahnbulleh, minister for energy consumers, said this produces a situation in which consumers often do not access the compensation they’re entitled to due to time pressures or fatigue with a complex system.
“These reforms will take the pressure off consumers and onto the companies to ensure consumers get the compensation they deserve,” she said.
“Doing so will ensure energy consumers are better protected and empowered to take action when necessary.”
The proposals to make compensation fairer, quicker and easier, and covers areas including:
- Working with Ofgem to look at expanding automatic compensation to cover more key issues faced by consumers, including excessively long call waiting times, unexpectedly high bills when suppliers fail to adjust direct debits, suppliers not responding to complaints, or suppliers not complying with Energy Ombudsman final decisions
- Government working with Ofgem to look at further increasing the value of base-level compensation from £40, following the first increase since the payments were last set a decade ago
- Strengthening the Energy Ombudsman’s powers so that suppliers must comply with its final decision or pay compensation to the consumer
- Cutting the time before complaints can be escalated to the Ombudsman from eight to four weeks
- Making referrals to the Ombudsman automatic, instead of people having to do it themselves
The proposals are being delivered as part of the government’s Plan for Change to “deliver an energy market consumers can trust”, Fahnbulleh said, putting an end to unfair practices, holding suppliers to account and ensuring the consumer always come first.
“Today’s announcement is about taking the next steps, helping households to get fairer, quicker, easier compensation when things go wrong,” she said.
The announcement follows confirmations that 2.7 million extra households will receive £150 off their energy bills this winter as the Warm Homes Discount is expanded.
Fahnbulleh said this support is the latest in a raft of cost of living support made possible to stabilise the economy and repair public finances.
“Since last summer, interest rates have been cut four times, lowering mortgage costs, free school meals have been rolled out for more than half a million more children so kids can focus on learning,” she said.
Work is also being continued on how Ofgem can better drive the government’s missions for clean power and economic growth. This includes investigating how the regulator can support the private sector to invest in energy infrastructure, and ensuring those who want to invest in clean energy can do so safely and protected by robust and responsive regulation.
