EDF Energy have been gits and Ofgem has slapped their legs by ordering them to pay £3 million in compensation to benefit “vulnerable customers” after they’d been found guilty of breaching complaint handling rules.
The investigation followed an increase of more than 30% in the levels of complaints recorded by the company during the the introduction of a new IT system in 2011.
Ofgem found that, between May 2011 and January 2012, EDF didn’t have sufficient or correct procedures in place to adequately deal with, process, record and receive, all complaints in accordance with handling rules.
In English, that means customers had unacceptably long waiting times when calling them to tell EDF they are rubbish.
And if you wanted them to follow up your complaint, that wasn’t happening either.
When customers finally got through, EDF didn’t even make a record of all the required details for the complaints. Basically, customers may as well stuck their hand out of the window and tried to finger the moon.
Sarah Harrison, Ofgem’s senior partner for enforcement, said: “EDF Energy failed to have sufficiently robust processes in place when they introduced a new IT system and this led to the unacceptable handling of complaints. Their commitment to putting things right and paying £3m to the Citizens Advice Energy Best Deal Extra scheme and the Plymouth Citizen Advice Bureau’s Debt Helpline to benefit vulnerable customers is a step in the right direction to rebuilding consumer trust.”
That sounds alright doesn’t it? Sadly, this won’t ever happen because Labour are doing that thing where they say ‘when we get in power, we’re going to do all this amazing stuff’, when they know that they won’t get voted in, so they don’t have to actually implement anything.
They might as well say: ‘Under a Labour government, honest, hard working people can be certain that each town and city will have a unicorn mayor that shits £50 notes for everyone and each home will be fitted with a milkshake tap.’
Shadow energy and climate change secretary Caroline Flint said the current Government had helped to create a “broken energy market”.
She reckons that Labour will create a tough new regulator who will manhandle power suppliers and have the ability to cancel energy firms’ licences if they repeatedly commit the most “serious and deliberate breaches of their licence conditions which harm the interests of consumers”.
Flint is obviously playing to the gallery here, as everyone knows that we’re all irritated by the way the energy companies are currently doing their business thanks to crappy customer service, mis-selling, whacking prices up when they feel like it and all the rest.
Ofgem have issued 30 fines since 2001, which total in advance of £87m. That’s a lot of money to us, but presumably, energy firms have that kind of money down the back of the sofa in loose change.
Flint says that Labour’s reforms would see the regulator producing an annual scorecard for energy suppliers, reporting on the firms’ performance and identifying problem areas.
“The public have a right to be treated fairly by energy companies,” she said. ”Where firms fail to meet these standards, there must be tough and decisive action. Too often energy companies seem to view the regulator’s fines as a cost of doing business – not as a warning to get their act together.”
“Of course consumers must be compensated – but if energy companies persist in mistreating their customers they must know their licence could be on the line.”
Asda kicked it off when they bugled that they’d be cutting their prices today (Tuesday), capping petrol at 124.7p a litre and diesel at 128.7p, which is the lowest the chain have had since January 2011.
Then Sainsburys and Tesco both chipped in by saying they’d be reducing their prices on petrol and diesel too, although neither chain has a national price cap.
Supermarkets being supermarkets, they’ve always had the chance to offer cheaper deals for the driver, especially when tied up in points and rewards and brand loyalty type stuff.
However this move has been seen as a response to the otherwise slightly dearer independents, according to Paul Watters, AA’s head of public affairs
“We have seen competitive independent retailers east of London selling petrol as low as 125.9p a litre recently, which heralded a more general move by Asda,” he said. “With its national pricing policy, that lower pricing will be spread to drivers across the UK and will spur other retailers to follow.”
“However, depressed demand is also a major influence as families in the UK, Europe and the US continue to struggle with family finances. Although pump price movements have been relatively benign this year, the trauma of price spikes from 2011 into 2013 continues to haunt drivers.”
According to the AA, the average price across the UK yesterday was 129.71p a litre, and diesel was 133.74p.
The other supermarkets are set to follow, because that’s what they do.
That’s a bit careless.
The troubled energy supplier also reported a 38% drop in profit for the first six months of the year.
Profit before tax and interest payments on debt fell to £109m, or about £14 per customer, from £176m last year, npower said.
Understandably, the firm is spending more on improving its customer service, while costs of the government’s energy efficiency scheme have risen.
There’s also a worry that coal and gas stations may be shut down as low wholesale prices are making them run at a loss.
Npower also blamed the mild weather and one-off factors for the drop in profits to 2.27bn euros (£1.8bn), which is a little bit daft seeing as it is actually Summer and it is supposed to be the time people tend to lay off the radiator action.
They have until the end of the month to sort out its billing problems or it will be forced to stop all telephone sales to new customers. Apparently, their challenge for its customer services is to ‘become a more human interface while remaining compliant’.
Well, using language like ‘interface’ and ‘compliant’ is really going to help there, pal.
Possible things that face anyone being wretched with gas and electricity, include up to two years in prison.
At the moment, energy regulators can investigate and throw fines at the rule breachers, but can’t throw them in the clink.
According to the Department of Energy and Climate Change, the Government want to start getting tougher on those who abuse the system.
The new sanctions should come into being next Spring after a consultation period and parliamentary approval.
Ed Davey, Secretary of State for Energy and Climate Change said: “Manipulating the energy market is absolutely unacceptable, and these proposals provide a much stronger deterrent – more in line with the approach taken in the financial markets.”
“At the moment all we can do is fine (the perpetrators) and that’s not strong enough”.
Under the new rules, it would be a criminal offence to fix the price of energy at an artificial level or use insider information to buy or sell energy on the wholesale market. It would also be an offence to make misleading claims or conceal facts about wholesale energy prices to manipulate the market, especially if it could affect competition.
The UK’s energy companies are being encouraged to improve their transparency (or, to put it bluntly, stop being a bunch of murky herberts), after Ofgem started an industry review last month.
Rachel Fletcher of Ofgem chips in with: “We want the strongest possible deterrents in place to guard against market manipulation and insider trading. We put forward the case to government for greater powers to take action if needed, and we welcome this consultation.”
The competition watchdog will unleash a final report based on its findings at the end of next year.
Independent figures claim to show droves of households switching their energy supplier as the price of energy carries on going up.
Approximately 100,000 customers a month have swapped over from the big boys to an indie since last June. Snubbing the likes of npower, SSE, EDF, E.ON, Scottish Power and British Gas.
And according to the latest figures from the Department of Energy and Climate Change, 1.3 million customers and 866,000 gas customers have changed suppliers in the last three months of 2013.
And as if to rub it in, by switching his gas and electricity supplier to a company exempt from the charges slapped on domestic bills, Energy Secretary Ed Davey is now spared from paying the average £112-a-year green duty added to most domestic bills after he moved his account to a firm that does not have to pay it.
Maybe he should be doing something about stopping the Big Six being arseholes then, eh readers?
CEO Sam Laidlaw has been laying into Ofgem, saying that their estimate for the amount of profit BG stand to make from the average household this coming year (£106) is wrong.
He said it’s actually closer to £40 – 20% down on last year – and got very shirty indeed. It also didn’t appear to be making any moves to cut energy tariffs. WHAT A SURPRISE.
Laidlaw stroked his Arctic fox trimmed lapels, turned over in his bath of Cristal and said:
The Ofgem analysis is a theoretical analysis. What we are actually publishing today is the actual facts. We have been in discussions with Ofgem for a number of years about this methodology, which has its deficiencies and they recognise that it needs to be changed.’
But quibbling over Ofgem’s calculations doesn’t alter the fact that the warm weather was to blame for their slide in profits, and that they still have a responsibility to lower their prices so that customers don’t end up overpaying and in penury as a result.
Ricardo Lloyd from Which! issued his usual robotic statement, but it doesn’t look like anyone at BG will be listening. He said:
‘British Gas profits are down because of a warm winter, not lower prices.Energy companies must do everything they can to pass on any savings to their customers including falling wholesale and network costs.’
Shadow energy minister Jonathan Reynolds said that the energy market wasn’t working and added:
‘Britain’s hard-pressed bill-payers have seen their energy bills rocket, despite falling wholesale costs, while David Cameron sits on his hands and repeatedly fails to stand up to the big energy companies.’
The results of this CMA profits investigation can’t come soon enough, eh?
BG are blaming the mild weather for the slump. CEO Sam Laidlaw put down his chalice of claret and medium rare Wagyu steak and said:
‘With challenging trading conditions on both sides of the Atlantic in the first half, earnings will be lower in 2014 than in 2013. However, the group is well positioned to return to growth in 2015.’
However, operating profits dropping by a quarter is quite a big deal, isn’t it? And this is despite Ofgem arguing that energy suppliers are making more profit than ever off the average home – it goes up to £106 per household this year.
As the Big Six are coming under increasing pressure over household bills, not to mention the massive investigation into profits by the CMA, things must be getting a bit heated at BG.
Do we feel sorry for them that their profits are down?
Sorry, we can’t hear you for the cheering…
Ofcom has approved a £17bn upgrade for the UK’s electricity networks over the next eight years – but customers will save because the budget is lower than the energy companies have previously been allowed to spend.
£111 of our annual fuel bill is currently set aside to pay for network upgrading and maintenance. Ofgem say this will drop to £99 under the new cap.
But not everybody will save the same amount. It depends on what company runs the power network in your area. In the North West you could be getting a saving of £26, while customers in the South East might only get a piddling £5.
And also there’s no actual guarantee we’ll see this mythical £12 saving at all, as apparently private companies are quibbling with Ofgem about other aspects of the bill.
But, you know, we’ll take what we can get. Now all we have to do is find something to spend this imaginary £5-26 (or maybe £12 on). But don’t go mad at the shops, because you might not get it at all.
Ain’t life grand?
Ofgem has slapped SSE and UK Power Networks on the wrist for their inept handling of last year’s winter storm damage, and ordered them to pay out an extra £3.3million to the people affected – that’s on top of the £4.7m they’ve already paid.
Ofgem added that they would be doubling the minimum amount energy companies should pay out for storm-a-geddon power fails and warned that energy companies need to pull their fingers out and get their customers re-connected more efficiently.
They said that SSE and UKPN ‘could have done more to get customers reconnected faster and to keep them better updated on what was happening.’
Last year, thousands of SSE customers were reduced to shivering in the dark and huddling around a candle on Christmas Eve, but Ofgem said although SSE and UKPN were specifically and adversely affected by the weather, they were a bit crap at fixing things.
Meanwhile, SSE has reported a loss of 110,000 customers over the last three months. But they’re still not exactly cash strapped. It’s reporting a slight rise in earnings per share.
Will the Big Six profit bandwagon ever be derailed? Only the Competition and Markets Authority knows the answer…
Are you all set to have your mind blown? Ready to be told things that will make you scream with glee that someone is on your side?
The CMA have identified opaque pricing, the dominance of utilities and an uncompetitive retail market as the main negative factors of the industry.
Doesn’t that feel amazing? Finally, someone is sticking up for us all! They’ve translated our feelings into a succinct report! And, obviously, we should hand the CMA a degree in stating the bleedin’ obvious.
Their investigation into the energy market isn’t finished yet and they’ll publish a final one before Christmas Day in 2015.
“We are looking to identify the underlying causes, at both wholesale and retail level, which could be leading to the widespread concerns that have surrounded this market in recent years – including rising energy bills, service quality, profitability and uncertainty over future investment,” said Roger Witcomb, chairman of the Energy Market Investigation Group.
The CMA statement said they’d spotted “four candidate theories of harm” which explain how market characteristics were adversely affecting competition. Shall we break them down?
- Opaque prices and low-level liquidity in wholesale power and gas create barriers to entry in retail and generation.
- Vertically integrated electricity companies harm the competitive position of non-integrated firms to the detriment of customers.
- Market power in electricity generation leads to higher prices.
- “Energy suppliers face weak incentives to compete in retail markets, due in particular to inactive customers, supplier behaviour and/or regulatory interventions.”
So in short, the Big Six aren’t keen on telling us how they come up with their prices, there’s not enough competition to get the prices down, it is too hard for new energy companies to start up and people can’t be bothered to switch suppliers because they’re all rubbish. You knew that. Everyone knew that.
“This is a market which is very complex so it is important at an early stage to focus the investigation on the most relevant issues,” said Witcomb.
SSE have seen 110,000 people ditching them in the three months since they announced their freeze.
They blame “very competitive market conditions” for the losses.
What’s worse is that SSE had already lost 370,000 customer accounts in the year to March and these losses will heap yet more pressure on the energy giant to cut prices further, especially given that everyone now knows that there’s been falls in wholesale electricity and gas costs.
However, that’s not likely to happen, mainly because energy companies are all complete arseholes. In the case of SSE, they have a further excuse – they’ve already bought most of their energy further in advance than normal, which means customers will be locked into higher prices. Well done SSE.
Will Morris, SSE group managing director for retail, said: “We operate in a very competitive market and, as you would expect, different supply companies take different approaches and have different propositions.”
“There are some short-term offers available at the moment, which a limited number of customers can benefit from. These offers will come and go, but SSE is offering all customers the long-term certainty that its standard prices will not go up until at least 2016. Things can change very quickly in energy; this is an unprecedented long-term commitment and it should be judged over the long term.”
No. You’ll be judged over your prices and whether or not people can afford them.
The people at Ofgem have done a study which says the 9 million people renting in the UK are losing out to the tune of £200 million. They say renters are less likely to shop around, so they’re getting stiffed on deals.
This data was gathered from Ofgem’s incredibly exciting ’2014 Consumer Engagement survey’ which showed that three-quarters of tenants have never switched supplier and one in five isn’t aware that they are able to.
Dermot Nolan, Ofgem’s CEO, said: “The number of British households renting stands at 9 million and counting, yet research has shown that this group is not shopping around for their energy, and missing out on savings of up to £200.”
Their maths, not ours, just in case any of you lot start moaning.
Weirdly, it seems that there’s a lot of people out there who think they are stuck with the energy supplier who provide their utilities on the day they move in. Even if your landlord takes care of the bills and your rent is all-inclusive, you can still shop around and ask them to go cheaper if you want.
This is all part of Ofgem’s “Be an Energy Shopper” campaign, which hopes to help consumers realise that they aren’t in a situation that is akin to an energy company chaining them to a radiator and waiting for Stockholm Syndrome to kick in.
Ann Robinson, Director of Consumer Policy at uSwitch.com, said: “These findings are worrying, particularly given the dramatic rise in the number of people having to rent as they can’t afford to get onto the property ladder. Renters need all the help they can get to keep costs down and switching energy provider is an extremely easy way to reduce their monthly bills.”
“Ofgem’s campaign to clear up tenants’ misconceptions about their rights is a step in the right direction, but more should be done. We call on landlords and letting agents to provide all new tenants with information on their current energy provider and remind them of their right to switch. This will empower renters to make an informed choice about who provides their energy.”
It seems new billing systems have caused all kinds of problems for customers, but really, there would’ve been complaints either way because, especially in the case of npower, it looks like they’re actively trolling everyone now.
Citizens Advice and Citizens Advice Scotland said complaints about npower rose from 306.8 for every 100,000 customers to 592, in the last quarter of 2013. In fact, complaints about all suppliers increased in the first quarter. They really couldn’t care less could they? They can afford the fines and no-one is looking like they’re going to do anything about it.
Have the Big Six got blackmail files on Cameron and Clegg? Dirty Polaroids and taped conversations with sex-workers or something? That’s the only explanation for their Teflon state of mind.
Last month, Ofgem warned npower to sort out their billing balls-ups by the close of August, or stop all telesales activity. Ofgem are also investigating npower’s failings as a whole, but you get the impression that between the CA and Ofgem, npower will work a way around it.
The chief executive of Citizens Advice, Gillian Guy, said: “The knock-on effect of poor billing systems can turn household budgets upside down. Many people do not have the spare cash to cover the cost of a large bill that suddenly lands on their doorstep.”
“While we recognise npower is receiving more complaints because it is starting to get over some of the earlier issues, it needs to do more to stop consumers’ problems escalating. Offering repayment plans and discussing ways they can help consumers will nip issues in the bud and remove the need to complain.”
“Scottish Power has an opportunity to learn from other suppliers’ billing system failures and address these problems now so more consumers won’t have cause for complaint.”
“A rise in complaints about all suppliers is concerning. Suppliers won’t win the trust of customers back unless they show they understand what consumers need, recognise the financial pressures many people are under and are able to sort out problems quickly. This is something that all suppliers can act on.”
Energy providers are already public enemy number one, and now Ofgem has underlined the point by allowing British Gas to pay out a total of £1million in compensation to people it mis-sold its energy to. You might wonder how energy can be mis-sold, after all, you will actually get gas and electricity from them. However, the offences in question concern salespeople lying about ‘exaggerating’ the amount of savings that could be earned by switching to British Gas.
The mis-selling took place in Sainsbury’s stores nationwide and in Westfield shopping centre, Shepherds Bush. In addition, staff and branding in Sainsbury’s stores did not make clear that British Gas was the supply partner for Sainsbury’s Energy, thereby fooling all those who already had an axe to grind with British Gas.
Ofgem has today revealed that, between February 2011 and March 2013, British Gas staff in Sainsbury’s stores and Westfield shopping centre made exaggerated savings claims to prospective customers. It seems some unscrupulous sales staff did not compare tariffs on a like for like basis, even going so far as to compare monthly direct debit payments with quarterly payment methods to produce inaccurate savings estimates. This shocking underhandedness meant that, unsurprisingly, some customers were told that they would save money by switching, but in fact they paid more with Sainsbury’s Energy or British Gas than they would have paid if they had remained with their current supplier.
To be fair to British Gas, they identified the issue and voluntarily reported it to Ofgem in April 2013, taking immediate action to correct the issues. Ofgem therefore decided to accept British Gas’ compensatory offer in lieu of opening a formal investigation.
British Gas has identified customers who were potentially mis-sold to and has made an average payment of £130 to 4,300 affected customers. It was unable to contact around 1,300 ex-customers, so £434,000 in compensation will be paid to the British Gas Energy Trust to directly benefit customers. Rather than the ex-customers who got shafted.
Sarah Harrison, Senior Partner in charge of enforcement said: “Ofgem welcomes British Gas’ action to tackle its sales failures and compensate customers quickly when it became aware of mis-selling. Ofgem expects all suppliers to put this poor behaviour behind them and really start acting in a way that will help consumers trust energy suppliers. Where they don’t, Ofgem will act.” Or sometimes, Ofgem will allow energy companies to define their own crimes and decide their own punishment…