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Response to Ofgem’s statutory consultation on domestic supplier-customer communications rulebook reforms

18 October 2018

Response to Ofgem’s statutory consultation on domestic supplier-customer communications rulebook reforms [ 310 kb]

We think that positive changes have been made since the policy consultation, and support the proposed new principles for supplier-customer communications. We think that the consumer outcomes set out by Ofgem are the right ones, and will challenge suppliers to improve their communications in order to meet them. This is particularly the case for consumers who are currently poorly served, including consumers in vulnerable situations, consumers who pay by prepayment and those on time of use tariffs.

In the past, we have been concerned that new principles have been difficult for suppliers - and particularly small and new entrant suppliers - to understand, within the context of other rules in the licence. We think that the structure of the proposed licence conditions, pairing the new principles alongside the relevant prescription in each area, should make it much easier for suppliers to understand what is expected of them.

We have supported the transition to more principles-based rules, in order to allow more innovation and achieve better consumer outcomes. However, we are concerned that these are not always being followed, or having the impact that we might have anticipated.

A strong monitoring and compliance framework is vital to ensuring this outcome is avoided across the areas where principles have been introduced in the past few years. We therefore welcome Ofgem’s commitment to provide greater detail on its monitoring of supplier performance at a later point, and an overview of the new arrangements should ideally form part of the decision document.

Monitoring is just the first step. When issues are identified, Ofgem must take prompt compliance action where appropriate. We support Ofgem’s new approach in being more transparent about the opening of compliance cases, as this could help other suppliers identify and address their own compliance issues more quickly. The upcoming licensing review will also represent an opportunity for Ofgem to look again at its compliance tools. We would support the introduction of new rules to ensure suppliers have to provide more information upfront about how they plan to meet the required customer outcomes.

We also think that, in respect of customer communications, there are some important areas that have been out of scope, which may make the reforms less effective than they otherwise would be. We think the time is right to review the customer journey for complaints in energy, including the Complaint Handling Standards. We are concerned that there is no longer a shared understanding of these rules across industry, which threatens the viability of the complaints framework.