Omni Energy in hot water for transferring customers to rivals without their permission
Struggling energy supplier Omni Energy has landed in hot water after it revealed that it had transferred thousands of its ‘unprofitable’ customers to rival suppliers without their consent.
A desperate move?
Last week Omni sent an email to 10,000 of its customers telling them that that the company was looking very likely to be the next supplier to exit the market as a result of the record high wholesale gas prices.
In a bid to save money and try to ride out the storm the company advised its customers to switch to rival companies, something that is not really an option for consumers after most suppliers have pulled their favourable tariff options from the market.
Instead, the only options left are the highly priced fixed plans and price-capped standard variable tariffs.
In a move that has angered the regulator, Omni then switched customers on their behalf unless they objected, except that most of those customers were actually informed until they were contacted by the new supplier.
Such an act violates Ofgem regulations.
A breaking of GDPR and Ofgem regulations?
According to the Guardian newspaper the supplier manually signed up their unprofitable customers with rival suppliers such as Scottish Power, using their personal details to open new accounts in their name.
Up to 3,000 customer accounts were reportedly switched this way, all without their knowledge or consent.
Such an act is likely a breach of the General Data Protection Regulation (GDPR) as well as a breach of licensing conditions.
“We’re aware of the apparent switching of Omni Energy customers to other suppliers, including Scottish Power, and taking appropriate action to minimise the impact on affected customers. Ofgem has been advised of this,” said a spokesperson for Scottish Power.
Once notified, Ofgem said that it had intervened and instructed Omni to cease the unauthorised switches.
“Supplier generally cannot switch customers away without their consent, except where a supplier sells some or all of its customer book as part of a trade sale to another supplier,” said an Ofgem spokesman.
Also read: A 34% hike in the energy price cap is needed to save struggling energy suppliers
A matter of survival
Such an act is surely one born out of desperation, and a position that many energy supply company’s are finding themselves in.
“We may have breached GDPR data protection regulations, but we acted in good faith. All customers effected have been contacted to obtain their consent for the switches. Omni has always provided our customers with accurate information regarding their energy supply.
‘We then sent a further email to our customers that no switch will complete without their confirmation. All switches have since been cancelled.
‘It is a very difficult time for Omni Energy, and we have had to make several redundancies in the past weeks as we have made efforts to restructure our business. We are in active dialogue with Ofgem,” said an Omni spokesperson.
We’ve yet to see whether Ofgem will take punitive action against the supplier or whether it could show some leniency due to the current crisis engulfing the industry. The possible breach of GDPR, however, could garner a punitive response.
Also read: Ofgem vows to crack down on energy suppliers following increasing scrutiny of its own performance
Further Reading
What has caused the Energy Market Crisis and what does it mean for the energy retail market?
Energy Price Cap rises to record high but it’s far below what is needed
Ofgem warns of more energy supplier failures and admits to needing a new approach
Dyball Associates are proud to help new supply businesses successfully launch in the UK market.
Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers to get set up and start supplying.
For more information on how to start and manage an energy company, get in touch with Dyball Associates today.
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