Ofgem Launches New Automatic Compensation Scheme for consumers

The new scheme will guarantee compensation for certain supplier mishaps

Ofgem Launches New Automatic Compensation Scheme for consumers

As of today, Ofgem will start imposing new rules that require suppliers to pay a minimum £30 in compensation if a customer's credit balance is not paid to them within 10 working days of switching to a new supplier.  If the supplier then fails to pay the compensation in a timely manner (more than 10 days from the date the money is owed), then they will owe the customer an additional £30.

Although the vast majority of switches go smoothly, there are rare cases where issues do arise. This new compensation programme will be a major incentive for suppliers to be sure that switches meet the proper industry standard.

“We applaud Ofgem’s efforts to make switching even safer, quicker and more reliable than ever.

Victoria Arrington, spokesperson for energyhelpline said:

“Automatic compensation, combined with new supplier licencing requirements from Ofgem, means that changing energy supplier remains the easiest big bill to switch. This is great news, as the benefits of switching can be so great for consumers – with an average of £300* saved per year.

“Our advice at energyhelpline is to keep in contact with the supplier should you have any issues, and keep a detailed record of your communication. Should you ever need to get compensation, this documentation could be prove to useful.”

Rob Salter-Church, director, retail systems transformation at Ofgem, said:

“When a switch goes wrong, it can cause inconvenience, and in some cases, real worry and stress for those affected. Automatic compensation payments from 1 May, and additional payments this year, should serve as an incentive for suppliers to raise their game and get switches right first time. These new requirements, together with the introduction of the price cap, and tightening the rules on new suppliers entering the market, demonstrate our commitment to protecting consumers and ensuring they get a better deal.”

Ofgem also added that "Suppliers will have to report data on payments to Ofgem which will monitor their compliance to ensure that suppliers are implementing new regulations correctly." and also that "Compensation for delayed switches and late final bills will be introduced later this year."

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