Delayed Refund Compensation for Supplier Switchers
When you switch energy suppliers you will now receive compensation for any delayed refunds of owed money if you meet new requirements. The new measure has been introduced by industry regulator Ofgem to placate customers and incentivise suppliers.
Ofgem insist that energy suppliers must return the final credit balance to switching customers promptly, or pay a compensatory amount. The new measure began at the beginning of May.
How the Compensation Payments Work
Customers will now be entitled to a £30 additional payment if their former supplier delays refunding them their credit balance. The refund is obviously only due after they have completed the switch to a new supplier. The time limit for refunding money owed is within two weeks or 10 working days of the final bill being issued. If they fail to repay the owed money within that time, they must pay the compensation amount.
It is believed that around 200,000 customers a year will likely receive such compensatory payments. Despite demands from consumer groups, Ofgem are not introducing automatic compensation if the final bill is over six weeks late.
More Protection Against ‘Erroneous Switches’
Customers are also entitled to compensation for what are cynically described as ‘erroneous switches’. These involve customers being mistakenly switched to the wrong supplier. The maximum compensation amount in such cases will be £120.
One of Ofgem’s directors, Rob Salter-Church, said of the new measure, “When a switch goes wrong, it can cause inconvenience, and in some cases, real worry and stress for those affected. Automatic compensation payments should serve as an incentive for suppliers to raise their game and get switches right first time.”
These new requirements come in the wake of record breaking numbers of customers switching supplier. According to trade association Energy UK, over 600,000 customers switched supplier during April this year. That is an increase of 34% on April of 2018. It also brings the number of switched customers to over two million in 2019 so far.
New Requirements a ‘Wake-Up Call’ for Suppliers
A press release from Ofgem stated, “The new requirements will give customers peace of mind that they will be compensated if something goes wrong. They should also serve as a wake-up call for suppliers to reduce the number of problems in switching. Ofgem will separately introduce new requirements for suppliers to pay automatic compensation for delayed switches and providing late final bills later this year.”
Ofgem monitor the compliance of suppliers via payment data reports to ensure you are correctly implementing the new regulations.
Mr Salter-Church added, “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.”
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