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Saturday, 30 July 2011

How Not To Deal With A Regulator

The 'Big Six' energy providers are actually threatening to steal the regulatory limelight from UK retail banks - which is no mean feat. Ofgem says it has levied a total of £12.5m in fines this year already. In the past few weeks alone, SSE and Scottish Power have found themselves under scrutiny from MPs. And British Gas has complained publicly that it's recent fine of £2.5m for complaints mishandling is "totally disproportionate", seeming to suggest they should've been given credit for having to spend £4m fixing the problem.

But you'd expect a little more humility from a company that is raising consumer gas and electricity prices at an average of 18% and 16% respectively, and contributed £270m of its parent's £1.3bn profit for the first half of this year. 

Ofgem explains that its complaint handling regulations include the following requirements ("the breaches Ofgem found against British Gas in this case are in bold):
  • a common definition of a complaint between (sic) energy suppliers;
  • a requirement for suppliers to record complaints upon receipt and follow up contact with the customer after the initial complaint;
  • a requirement for suppliers to have a complaints handling procedure and be able to explain to customers how they can make a complaint;
  • a requirement to signpost customers to the Energy Ombudsman if the complaint is not resolved;
  • a requirement to deal with consumer complaints in an efficient and timely manner, and allocate sufficient resources to do this;
  • a requirement to publish information on complaints."
Here's an explanation of Ofgem's industry governance arrangements.

And here's where to complain if you are a consumer or small business (once you've given the provider a chance to resolve the dispute).

Meanwhile, Ofgem says that it's:
"currently investigating Npower and EDF Energy for complaint handling; Scottish Power, Scottish and Southern Energy, EDF Energy and Npower for misselling; and is undertaking two investigations into Scottish Power for potentially misleading marketing and the difference between its Standard Credit and Direct Debit Tariffs."
I'm sure the suspects are bound to accept any adverse findings with good grace...