REG - OFGEM - Utility Warehouse agrees to pay £1.5m

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10/11/2021 08:05

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RNS Number : 8468R  OFGEM  10 November 2021

Utility Warehouse agrees to pay £1.5 million for issues relating to customers
in debt

·      Utility Warehouse failed to treat some of its customers fairly
and to offer services and support to those in payment difficulty in all
cases

·      Customers were not consistently offered services, such as debt
repayment plans and energy efficiency advice, which left some of its customers
disadvantaged

·      Utility Warehouse will pay £1.5 million to Ofgem's voluntary
redress fund for its failings

Utility Warehouse accepts it failed to consistently treat customers fairly,
which resulted in some customers being disadvantaged and facing increased
financial hardship.

Ofgem, the energy regulator, was made aware of the failings following an audit
report in 2018. A formal investigation was then opened which found that
Utility Warehouse's failings took place between 2013 and 2019.

The supplier did not consistently offer to put domestic customers struggling
to pay their energy bills on debt repayment plans, to allow payments to be
taken direct from customers' benefits or to take into account customers'
ability to pay when calculating regular instalments as required.

Customers were not consistently offered the option of paying back charges via
the voluntary installation of a pre-payment meter or offered energy efficiency
advice on how to reduce their bills. In some cases, this led to the
unnecessary installation of pre-payment meters under warrant.

During the course of the investigation, Utility Warehouse also raised the fact
that it submitted some inaccurate Social Obligation Reporting (SOR) data to
Ofgem between 2013-2019. This data allows Ofgem to review suppliers'
performance regarding their social obligations and compliance with licence
requirements, challenge poor performance and inform policy decisions.

Ofgem has decided to close the investigation through alternative action after
considering that Utility Warehouse has accepted its failings and put in place
measures to prevent this from happening again. It has offered to pay £1.5
million into the voluntary redress fund, which supports vulnerable customers
and innovation within the energy sector.

Cathryn Scott, Director of Enforcement and Emerging Issues at Ofgem, said:

"Energy suppliers are required to look after their customers, especially those
in vulnerable situations. Between 2013-2019, Utility Warehouse failed to take
the necessary steps to treat some customers in payment difficulty fairly,
depriving them of the opportunity to manage their energy debt and ongoing
energy costs.

"While the unprecedented and unexpected rise in gas and electricity prices
over recent months has put energy markets under severe strain, we expect
suppliers to continue to comply with their licence obligations and treat
people fairly, including by providing support to vulnerable consumers. Where
we see poor behaviour, Ofgem will be ready to step in and take swift action."

Notes to editors:

·      Ofgem's investigation into Utility Warehouse was first opened in
June 2018 into SLCs 27.5, 27.6(a)(i), 27.6(a)(ii), 27.6(a)(iii), 27.6(b)
(services that must be offered to customers in payment difficulty), 28B (use
of warrants relating to pre-payment meters and other supplier actions in
relation to debt), 25C, 0 (Standards of Conduct - which in this case includes
assessment of ability to pay and erroneous PPM installation under warrant) and
expanded on 18/10/2019 to include SLC 32 (Social Obligations Reporting).
Ofgem no longer pursues breach behaviours under SLC 27.7 and 28B. See:
Investigation into Utility Warehouse's compliance with Standard Licence
Conditions
(https://www.ofgem.gov.uk/publications/investigation-utility-warehouses-compliance-standard-licence-conditions-slcs-25c0-275-278-28b-and-32-electricity-supply-licence-and-gas-supply-licence)
 

·      Suppliers are required to regularly submit Social Obligations
Reporting data
(https://www.ofgem.gov.uk/energy-policy-and-regulation/policy-and-regulatory-programmes/consumer-vulnerability-protections)
to Ofgem in accordance with their licence. This data is necessary for
suppliers to provide as monitoring and reporting form a key part of Ofgem 's
work to protect the interests of consumers.

·      The Voluntary Redress Fund provides money to charities to deliver
energy related projects that support energy consumers in vulnerable
situations. It also helps to deliver benefits to consumers, who were
negatively impacted by the specific issue that triggered the redress payment.
For more information about Ofgem's Voluntary Redress Fund, see: Ofgem appoints
Energy Saving Trust to distribute payments from rule-breaking energy companies
to charities
(https://www.ofgem.gov.uk/publications/ofgem-appoints-energy-saving-trust-distribute-payments-rule-breaking-energy-companies-charities)
 

·      More information on Ofgem's Enforcement Guidelines and
Alternative Action can be found on our website
(https://www.ofgem.gov.uk/sites/default/files/docs/enforcement_guidelines_october_2017.pdf)
.

·      Alternative action is one of the enforcement tools that Ofgem can
use to address ongoing concerns. Alternative action is appropriate in this
case as Ofgem is satisfied that the full extent of the breach has been
established and the actions taken by Utility Warehouse fully address our
concerns that the breach will not recur.

 

For media, contact:

Michelle Amos: 020 7901 1881

Media out of hours mobile: 0792 882 9894 (media calls only)

General enquiries (non-media)

If you are an energy customer looking for help and advice, including
complaints about energy firms, please see our Household gas and electricity
guide (https://www.ofgem.gov.uk/consumers/energy-guides) . Citizens Advice
also provide a free, impartial helpline service across a range of issues on
0808 223 1133.

We also regularly share news and post general advice to help consumers get the
most out of their energy services via our @Ofgem twitter
(https://twitter.com/ofgem/)  and Facebook pages
(https://www.facebook.com/ofgem) . If you have an enquiry or complaint
relating to Ofgem's policies or functions, contact us
at consumeraffairs@ofgem.gov.uk (mailto:consumeraffairs@ofgem.gov.uk)  or on
020 7901 7295.

For all other non-media related enquiries, please visit our Contact us page
(https://www.ofgem.gov.uk/contact-us) .

About Ofgem

Ofgem is Britain's independent energy regulator. Our role is to protect
consumers now and in the future by working to deliver a greener, fairer energy
system. We do this by:

·      Working with Government, industry and consumer groups to deliver
a net zero economy at the lowest cost to consumers.

·      Stamping out sharp and bad practice, ensuring fair treatment for
all consumers, especially the vulnerable.

·      Enabling competition and innovation, which drives down prices and
results in new products and services for consumers.

For facts, figures and information about Ofgem's work, see Energy facts and
figures (https://www.ofgem.gov.uk/news-media/energy-market-facts-figures)  or
visit the Ofgem Data Portal (https://www.ofgem.gov.uk/data-portal/overview)
.

For energy insights and updates straight to your inbox from Ofgem, please
subscribe (https://www.ofgem.gov.uk/subscribe-our-news-and-communications)
.

Follow us on Twitter @ofgem (https://twitter.com/ofgem) , LinkedIn
(https://www.linkedin.com/company/ofgem)  and Facebook
(https://www.facebook.com/ofgem) .

 

 

 

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