Regulator Ofgem has given warnings to energy companies Scottish Power and Utilita for failing to protect their customers. The pair have been given Provisional Orders they must comply with following a series of apparent failings.
Utilita was warned about its lack of support for vulnerable customers with Scottish Power being told off for debt repayment plans. The Provisional Orders were issued on Friday, September 9 for Utilita and Wednesday, September 21 for Scottish Power.
This means both companies must comply with their obligations to protect customers in particular circumstances. The warning comes ahead results of a full market review done by Ofgem into how suppliers are supporting struggling customers with the findings due to be published soon.
Cathryn Scott, Ofgem's enforcement and emerging issues director, said: "These orders to Utilita and Scottish Power are a clear signal to suppliers about the vital importance of protecting customers. The rise in the cost of living is an increasingly important public issue, and we expect urgent and immediate action on the points raised, as well as constructive engagement with Ofgem during the process."
What Scottish Power must comply with
A number of failings were found around the way in which Scottish Power sets debt repayment plans and deals with customers struggling with bills. The energy company must comply with its licence conditions in this area and must:
- Pause disconnections for those customers with active, agreed or overdue repayment plans of £5 per week (per fuel) or below.
- Review and update all call scripts, training materials, policies, communications with customers and provide training for company staff, to ensure they reflect that there is no default minimum repayment amount when sufficient information is available on a customer’s ability to pay.
- Contact and review all customers on debt repayment plans of £5 per week, per fuel, or below ensuring they are based on each customer’s ability to pay.
- Commission an independent audit of its own processes to assess whether they have been effectively implemented and provide the report to Ofgem by no later than October 31, 2022.
- Fully engage with Citizens Advice, Citizens Advice Scotland’s Extra Help Unit and Ombudsman Services to ensure all referrals and off supply incidents are reassessed in line with the service level conditions
- Continue to engage with Ofgem over the coming months to ensure compliance with the relevant Standard Licence Conditions and other provisions of the Order.
What Utilita must comply with
Failings have been found in the way Utilita has been dealing with all customers, including vulnerable customers, customers on the Priority Services Register (PSR) and customers in debt. The energy company must comply with its licence conditions that govern Additional Support Credit, and ensure that pre-payment meters (PPMs) are safe and practicable for its customers.
Utilita is now required to:
- Cease the use of call scripts which tells customers that Additional Support Credit is not a licence requirement.
- Take ability to pay into account for all repayment plan calculations and on each occasion, Additional Support Credit is offered, calculate the instalments for repayment.
- Develop its Additional Support Credit policy to ensure compliance with the relevant SLCs.
By September 30, Utilita is required to:
- Review its cases where customers have been off supply to ensure that they are offered Additional Support Credit where required and assess whether prepayment meters remain a safe payment method in each circumstance.
- Offer a credit mode meter to all PSR supply dependant customers that is safe and practicable in all circumstances of the case.
- Review and engage proactively with all PSR customers’ requests for Additional Support Credit including to ensure that functionality of the prepayment meter is safe and reasonably practicable in all circumstances.
- Fully engage with Citizens Advice, Citizens Advice Scotland’s Extra Help Unit and Ombudsman Services to ensure all referral and off supply incidents are reassessed in line with the service level conditions
Utilita must provide Ofgem with an independent audit confirming its compliance with the other aspects of the Provisional Order no later than 4pm on October 31.