We welcome the Government’s proposals to introduce opt-in switching prompts and test opt-out switching to address the loyalty penalty in the energy market.
Low-income households are hit by the loyalty penalty more frequently than high income households despite being least able to afford the premium of default tariffs.
We also welcome the proposed design of the opt-in scheme which testing suggests significantly increases the rate of switching.
Given the current surge in wholesale gas prices that is putting many small suppliers at risk, it will be important that any future scheme has the necessary safeguards to ensure minimum service levels between suppliers who are included in the scheme.
Potential barriers to switching remain for those with debt or arrears. We propose adjustments to the Debt Assignment Protocol to ensure that those in debt can utilise switching to help tackle the challenges they face affording ongoing usage while they deal with debt repayments.
We also raise the need for information on how suppliers deal with debt to be readily available for those being sent prompts. We continue to raise the use of High Court Enforcement Officers (HCEOs) by energy companies as an excessive method of collecting debts particularly given the recently published guidance suggesting that HCEOs have been wrongly charging VAT to debtors for several years.
You can download our full response here.