Energy prices soar and EU poses 'joint gas purchase'
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Ofgem first became aware of problems at the firm in 2018 and launched a formal investigation. Its findings concluded Utility Warehouse did not consistently offer to put customers struggling to pay bills onto debt repayment plans as well as failing to allow payments to be taken directly from customers’ benefits. When installment payments were calculated it was found Utility Warehouse did not always take into account the customer’s ability to pay. In some cases, pre-payment meters were installed unnecessarily.
The provider also failed to consistently provide energy efficiency advice to help customers reduce their bills.
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.”
Utility Warehouse has accepted the findings and agreed to pay £1.5m.
During the course of the investigation, the provider also admitted it had sent inaccurate Social Obligation Reporting data to Ofgem between 2013-19.
Suppliers are required to regularly submit this data as part of their licence which enables Ofgem to review performance on the company’s social obligations.
The firm said it was “sorry that these customers were let down” adding “we’ve worked hard to address what were historic gaps in our processes and Ofgem recognised that this had been fully achieved by December 2019.”
The money won’t go directly to customers affected but will be paid into Ofgem’s voluntary redress fund which supports charities helping vulnerable customers.
The news comes at a particularly turbulent time for the energy industry with firms and consumers being hit by soaring gas prices.
So far this year nearly half of all the UK’s energy providers have gone bust affecting over 2 million customers.
17 of these have just been since September with predictions more could leave the market in 2022.
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Ofgem has launched a consultation this month looking at its energy price cap and the way in which this is calculated amid concerns this will need to rise considerably next year.
In an open letter to the industry, it also announced it would look at enhancing monitoring and enforcement of the sector to ensure firms “pursue a sustainable business model”.
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