Ofgem sets out plan to protect vulnerable consumers as market changes

The regulator has launched a consultation to find out how best to look after energy customers as the market undergoes ‘fundamental changes’

Ofgem has set out a plan to protect vulnerable consumers as the energy market undergoes ‘fundamental changes’.

The energy regulator suggests as the sector becomes increasingly digitalised, decarbonised and decentralised, the way consumers interact with their energy suppliers is likely to change dramatically.

Its Consumer Vulnerability Strategy until 2025 aims to ensure the interests of consumers are protected and to make sure they can benefit from these changes – Ofgem has outlined a number of themes on which it is now seeking views from stakeholders and consumers on.

These issues include improving the identification of vulnerable customers and supporting those who struggle to pay their bills, using data in a smarter way to deliver better insights, improving customer service, encouraging innovation and working with partners to “tackle issues that cut across multiple sectors”.

It defines vulnerability as when a consumer’s personal circumstances and characteristics combine with aspects of the market to create situations where they are “significantly less able than a typical domestic consumer to protect or represent his or her interests” or “significantly more likely than a typical domestic consumer to suffer detriment or that detriment is likely to be more substantial”.

It states its previous Consumer Vulnerability Strategy nearly eliminated the practice of disconnecting energy customers who were in debt and notes one of its first priorities now is to better protect vulnerable consumers who self-disconnect from their pre-payment meters.

The regulator is also considering implementing rules to ensure a customer’s ability to pay is properly considered when setting repayment plans for the future.

Mary Starks, Executive Director for Consumers and Markets at Ofgem, said: “We want to ensure that the energy market works well for everyone, including those least able to look out for themselves. Supporting and protecting customers in vulnerable situations is a key priority for Ofgem.”

“Energy is changing, as the sector rises to the challenge of decarbonisation with the creation of new businesses and business models. We cannot have a situation in which the most savvy and affluent customers benefit from these changes, while others are left behind. That is why we want to work with consumer groups and the industry to create a fair energy market for the future.”

The deadline for responses is the 8th of August 2019.

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