Greater protection for families and businesses in energy market

Stronger protections and consumer rights to be introduced for families and businesses when things go wrong in the energy market.

• Quicker redress and compensation through the Energy Ombudsman
• Crackdown on energy brokers to stamp out exploitation
• Protections for businesses when installing smart meters

Families and small businesses are set to benefit from greater protections and consumer rights when things go wrong in the energy market.

Plans to strengthen the Energy Ombudsman will help customers resolve disputes with their suppliers, giving it further powers to stand up for consumer interests.  

These include:

• halving the waiting period from 8 to 4 weeks before consumers’ complaints against their suppliers can be escalated to the Ombudsman
• giving customers quicker access to redress when their supplier lets them down
• forcing suppliers to pay compensation if the Ombudsman’s rulings aren’t implemented quickly enough

With almost 10% of consumer decisions handed down by the Ombudsman either implemented late or not enforced at all, the government has called time on the lengthy process leading to compensation.

The time the Ombudsman considers complaints would also be cut from an average of 6 to 4 weeks – helping consumers receive redress more quickly and easily when their supplier lets them down.  

New measures will also stamp out exploitation when dealing with energy brokers and price comparison sites, collectively known as third-party intermediaries.

Until now, these have been unregulated – allowing rogue brokers to use predatory sales tactics to take advantage of customers, selling them overpriced contracts in return for higher commission fees.

Ofgem will be appointed to regulate this market and put an end to such exploitation, ensuring small businesses and public organisations are no longer taken advantage of and can save money on their bills through improved competition and lower commissions.

New plans will also standardise contracts when businesses and public sector firms are required to install smart meters, providing up to almost £200 million in energy savings.

Together, these actions will prohibit anti-consumer practices, improve consumer access to redress and take a substantial step towards an energy market that puts consumers first. 

Energy Secretary Ed Miliband said:

"For too long, parts of the energy market have been letting consumers down and not paying up when mistakes are made.

Our reforms will put this right – making it faster and easier for families and small businesses alike to benefit from money back when things go wrong.

We will also end the wild west of ‘cowboy’ brokers charging sky-high fees for contracts handed out to companies, while also providing better protections when installing a smart meter."