Blog Post

Majority of Energy Suppliers failing to refund credit to customers within 10 days

Richard Simmonds • Sep 15, 2020

A new report has shown that the majority of energy suppliers are failing to refund credit owed to customers within the 10-working day target introduced by Ofgem last year.

What are the Ofgem rules?

In May 2019, Ofgem introduced new rules for energy suppliers to automatically compensate customers if they are erroneously switched or whether energy suppliers are late in refunding the credit balances of customers who have switched to a new supplier.

The rules were designed to encourage energy suppliers to reduce the number of problems consumers face when switching to a new supplier and it was hoped that it would boost consumer confidence in the energy switching process.

Introduced on May 1^st, 2019 the new rules are supposed to see consumers receive up to £120 if their energy supply is not restored to the correct supplier in the event they were erroneously switched in a timely manner.

Both the old and new suppliers are subject to the rules.

Customers are also entitled to £30 payments if their energy supplier fails to refund them their credit balance within 10 days after they switched.

Rules not working

The report produced by consumer group Which? Revealed that two thirds of the consumers who have switched their energy supplier since May 2019 were still due to receive outstanding credit from their previous supplier.

Out of all those surveyed just 46% of delayed customers received their refunds in line with the Ofgem rules that state they should receive a refund on any credit left on their account within 10 days from making the switch.

Some customers were also shown to have been waiting for six months or more for their payment and just 6% actually received their £30 compensation for the late credit payments.

The survey also highlighted the stress the process tolls on customers with hundreds of them being forced to jump through numerous hoops in order to try and get the money that they’re owed.

Fines not working

Since the rules were introduced Ofgem has issued numerous fines against energy suppliers but by analysing its own compensation data it is clear to see that the fines have done little to spur suppliers to improve.

“Suppliers should be proactively identifying where they miss the guaranteed standards and making a compensation payment accordingly. If customers believe they are owed compensation the supplier should explain why it hasn’t been paid to them. We are collecting quarterly data from suppliers in order to identify poor performers but as the rules were recently introduced, the data is still being put together for December 2019 onwards,” said Ofgem.

Challenging year

Many energy suppliers are struggling to get to grips with the new(ish) rules thanks to a combination of the challenges posed by the Covid-19 pandemic which is straining staffing levels and struggles to adapt often antiquated computer systems and software to the new rules and challenges.

This is where Dyball Associates can help. Our range of services can assist an energy supplier get to grips with its challenges and our customer relationship management system enables a supplier to gain oversight quickly and easily over its customers’ accounts.

Full customer management is driven via a secure and configurable web driven platform, which provides an umbrella view of a customer’s account and correspondence. Using our CRM system for energy suppliers, you can define trigger points within the system and automate customer correspondence by letter, email or SMS meaning that you will be able to clearly see what customers require a credit payment and who is owed compensation. This allows an energy supplier to adhere to the Ofgem rules.