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Conduct for suppliers in the retail energy market

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Our response to the Ofgem consultation on Standards of Conduct for suppliers in the retail energy market

We welcome the opportunity to respond to this consultation. We are the largest specialist debt advice charity operating across the UK. In 2016, we provided advice to almost 55,000 clients with debts to an energy or gas supplier.

Summary

Our response covers proposals on the Fairness Test, the reasonable steps threshold, an informed choices principle, Treating Customers Fairly and a broad vulnerability principle.

Fairness Test

  • We agree with the proposal to retain a Fairness Test for all the broad principles within the domestic Standards of Conduct. However, we would stress that a Fairness Test alone is not enough to ensure adequate behaviour by suppliers
  • We are not sure the new wording is an improvement over the existing wording. There are potentially situations where the removal of the ‘significantly favour’ provision could result in additional consumer detriment.

Reasonable steps threshold

  • We agree with the proposal to remove the ‘all reasonable steps’ threshold from the domestic Standards of Conduct. This would put the responsibility on suppliers, rather than entirely on the regulator, to ensure good customer outcomes
  • However, we would note that it is important to ensure Ofgem monitors the effects of the changes and continues to emphasise the importance of the Standards to prevent a gradual slump to non-compliance.

Informed choices principle

  • While we support the introduction of a broad “informed choices” principle into the domestic Standards of Conduct we urge the regulator not to assume this will end significant detriment in the energy market.

Treating Customers Fairly

  • It is clear from Ofgem research that the concept of Treating Customers Fairly has not embedded itself within the energy sector.
  • Therefore, although we believe the statement should be retained, we also believe the regulator must do far more to ensure suppliers use it as a genuine prompt to improving behaviour.

Vulnerability principle

  • We strongly support the proposal to include a broad vulnerability principle in the domestic Standards of Conduct.
  • We agree with the proposed definition of ‘Vulnerable Situation’.

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