Automatic compensation of up to £120 for energy switching issues

Ofgem hopes the move will reduce the number of problems and boost consumer confidence in switching

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Customers will receive automatic compensation of up to £120 from 1st May if they are mistakenly switched to a different energy supplier and not restored to the correct provider “in a timely fashion”.

Under rules set by Ofgem, when customers report a potential erroneous switch, they will receive a payment of £30 from each supplier if they are unable to agree within 20 working days if the issue has occurred.

The customer will also receive £30 from the contacted supplier if they fail to return the 20 Working Day Letter and an erroneously switched customer will receive £30 from their old supplier if they fail to re-register the customer within 21 working days.

They will also be entitled to a payment of £30 if their previous supplier is late in refunding their credit balance after they have moved to a different energy provider within 10 working days of the final bill being issued.

If they fail to make the initial payment, they will be required to make a further payment of £30.

Suppliers will have to report data on payments to the regulator, which will monitor their compliance to ensure they are implementing the new regulations correctly.

Ofgem hopes this will serve as a wakeup call for suppliers to reduce the number of problems and boost consumer confidence in switching.

Rob Salter-Church, Director of Retail Systems Transformation at Ofgem said: “When a switch goes wrong, it can cause inconvenience and in some cases, real worry and stress for those affected.

“Automatic compensation payments from 1 May and additional payments this year should serve as an incentive for suppliers to raise their game and get switches right first time. 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.”

The regulator added it will separately introduce new requirements for suppliers to pay automatic compensation for delayed switches and providing late final bills.

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