Energy suppliers will be required to take part in trials to find the best ways of engaging with customers to get them better deals.
Ofgem said the aim is to help disengaged customers ditch uncompetitive tariffs, adding suppliers have a special responsibility to those in vulnerable situations.
The trials are one of the recommendations put forward by the Competition and Markets Authority (CMA) following its energy investigation, which found two-thirds of customers on standard variable tariffs are paying far more than they need to.
They will start by this summer and will cover issues including:
- Suppliers telling customers what the cheapest deals are across the whole market
- Changing the name of standard tariffs, for example, to ‘out of contract’ tariffs
- Different ways of presenting information in domestic bills
- Changes to information customers receive once they come to the end of a fixed deal
Several suppliers are already carrying out trials voluntarily, according to Ofgem.
Rachel Fletcher, Senior Partner, consumers and competition said: “We must end the two- tier market where only a third of people get the best deals, while the remainder do not benefit from competition.
“By overseeing these trials, we will make sure that suppliers are doing everything they can to test ways to help these customers find better deals. This could be through switching supplier or helping loyal customers find cheaper tariffs with the current supplier.”
The regulator has launched a consultation on its intention to overhaul the sales and marketing licence condition, replacing the vast majority of prescription with five narrow principles.
It is expected to enable consumers to make informed choices and will run until 6th March.
Another consultation on the standards of conduct for suppliers in the retail energy market has also been launched.
It proposes amendments to the tests and thresholds within both the domestic and non-domestic Standards of Conducts licence conditions “so they would have a sharper focus on consumer outcomes”.
For the domestic Standards of Conduct, Ofgem suggests adding “broad principles” that require suppliers to enable consumers to make informed choices and to have special regard for those in vulnerable situations.
The consultation closes on 13th March.
Last month Ofgem launched a league table, revealing consumers could save as much as £261 a year without having to move to a different supplier.