Customer satisfaction fell to their lowest levels during the energy crisis and, despite recent improvement, the industry still lags behind most other sectors – and significantly behind leading sectors that currently have the best-rated customer service, such as banking.

To change this, Ofgem the regulator, has launched Consumer Confidence: A Step Up In Standards – Ofgem’s vision is to deliver a five-star customer service fit for an increasingly complex market transitioning at pace towards net zero.

This new vision, with its redesigned regulations and incentives will according to Ofgem help create a culture shift in attitudes paving the way for a consumer-centric approach across the sector.

Ofgem’s proposals include:

  • Revising back billing rules on how far back a customer can be charged for energy use, where the error was the supplier’s fault.
  • Reviewing supplier billing practices to understand where improvement is needed and how billing accuracy can be improved.
  • Building on Ofgem’s existing rules to ensure consumers get appropriate automatic compensation when basic things go wrong, and suppliers are held accountable when they do.
  • Exploring new powers for the regulator to take firm action against failing suppliers.
  • Considering adopting a model similar to the Financial Conduct Authority’s Consumer Duty.

Tim Jarvis, Director General, Markets at Ofgem, said:  “Consumer trust depends on good customer service, so it is critical that energy suppliers are reliable, accurate, accessible and fair.

“We have worked hard with suppliers to drive up standards and there are early signs that customer satisfaction is rising – but this is not enough. Our goal is create a customer service culture that sets the highest standard for all service sectors.

“So we are beginning the challenge of matching the high customer service scores seen in the best ranked sectors – such as banking, retail and tourism – and we will be looking to understand what we can learn from their practices.

“We are looking at the big picture here, and it’s not just making small changes, it’s about building a service structure capable of helping customers navigate a more complex future market, as new technology like electric vehicles and heat pumps rapidly changes the way consumers interact with their supplier.

 

“We will use all the powers at our disposal and drive the improvements we want to see but do not think the market will deliver without our intervention. Where necessary, we will work with government to create more powers to continue the transition already underway from a more reactive regulator dealing with problems as they arise to a proactive regulator, constantly striving for the best for consumers.

“Every energy consumer should have confidence that the system works in their interests and when things go wrong, they will be fixed quickly and effectively. The steps we are setting out will bring us closer to that goal.”

This is just the first step, in setting out a vision for the future of customer service in the sector, and Ofgem will work closely with stakeholders over the coming months, consulting on the proposals.

Improving customer service and building trust in the energy sector will take a collective effort from all suppliers, consumer groups, and charities, under the direction of Ofgem. Working with the government will also ensure the regulator has the levers and remit needed to make real change in improving the energy sector.