Ofgem is keeping the Ban on Acquisition-only Tariffs (BAT) – which ensures all customers have access to the best deals – after hearing the views of concerned consumer groups and suppliers demanding fairer treatment for existing customers.  

At a statutory consultation in May, campaigners warned that proposals to remove the ban risked returning to an unfair market for inactive switchers – often referred to as the “loyalty penalty” – and damaging consumer trust.  

Campaigners also added that the ban ensures that millions of customers in debt, who may not be able to switch to a new firm for months or even years, can access a better deal with their current supplier.  

After considering the views of all the respondents Ofgem has decided to keep the BAT in place, at least until its current expiration date of 31 March 2025. 

Charlotte Friel, interim director for consumer protection and retail markets, said:  “We have heard the voices of consumers loud and clear – and we have responded. 

“We are committed to acting in the best interest of all customers and the feedback we get from the public, industry, consumer groups and charities is vital in shaping the work we do. The responses we received showed a strong strength of feeling against short-term cut-price tariffs that shut out a supplier’s existing customers. 

“Whilst competition is an important part in driving better standards, so too is consumer trust – and it is clear that denying the best deals to all risks undermines our progress to restore confidence in the energy market. 

“Customers have the right to vote with their feet and switch suppliers for better service, or more support, but retaining the BAT will mean that they don’t have to keep moving to chase the best rate.” 

Responding to Ofgem’s decision on the Ban on Acquisition-only Tariffs, Energy UK’s deputy chief executive, Dhara Vyas, said: “It’s a sensible decision by Ofgem to retain the Ban on Acquisition only Tariffs (BAT) until at least March next year. The BAT has provided reassurance for customers during a turbulent time, and any changes to it should be made as part of a wider look at the role of competition and price protection.  

“There have been positive signs in the retail market over recent months – we are seeing fixed tariff offers returning to the market as well as an increase in switching. While the BAT has been an effective measure, it is also right that Ofgem is looking beyond switching as a way to measure engagement with energy. Focusing solely on short-term price competition fails to see the important roles customer loyalty and non-price competition can play in a fair and competitive retail market.”

The BAT was introduced as a temporary measure in April 2022 to provide more stability at the height of the energy crisis, removing often risky short-term discounted tariffs intended to attract customers from other suppliers. 

With the market improving, Ofgem launched a statutory consultation expressing a minded-to position to end the ban from 1 October, 2024 – reasoning that it could provide more choice for switching customers, while the price cap remains in place to protect existing customers from paying over the odds for their energy. 

Based on the feedback from this consultation, the regulator has decided to let the ban continue at this time to better understand its impact on the retail market. 

The longer term future of the BAT will be considered as part of Ofgem’s ongoing comprehensive review of the energy sector. The regulator is currently considering responses to a call for input exploring the future of price protection – including the suitability of the price cap in an evolving market and the potential role that a permanent ban on acquisition tariffs may play in the future model.