Energy supplier Utility Warehouse has agreed to pay £1.5 million after being accused of failing to treat some of its customers fairly and not supporting those facing hardship. This has been concluded by the energy regulator Ofgem following an audit report from 2018.
How did Utility Warehouse fail to fairly treat its customers?
According to the regulator Ofgem, Utility Warehouse has accepted that it failed to offer customers services such as debt repayment plans and energy efficiency advice consistently between 2013 and 2019. As a result of this, Ofgem has deemed Utility Warehouse’s treatment of its customers unfair as it failed to offer services and support to those in payment difficulty. The services which customers weren’t offered were debt repayment plans and energy efficiency advice.
The energy supplier consistently didn’t offer debt repayment to their domestic customers who were struggling to pay their energy bills, allow payments to be taken directly from customers’ benefits nor did they take into account customers’ ability to pay when calculating regular instalments as required. This left many customers unsure about how to plan their finances and in some cases led to the unnecessary installation of pre-payment meters.
How will the supplier cover for its mistake?
Utility Warehouse has accepted that they failed to meet customer obligations and has agreed to pay £1.5 million to Ofgem’s voluntary redress fund. The energy regulator became aware of these failings through an audit report from 2018, which found that they had taken place between 2013 and 2019.
Cathryn Scott, Director of Enforcement and Emerging Issues at Ofgem, said:
“Energy suppliers are required to look after their customers, especially those in vulnerable situations. Between 2013-2019, Utility Warehouse failed to take the necessary steps to treat some customers in payment difficulty fairly, depriving them of the opportunity to manage their energy debt and ongoing energy costs.”
“While the unprecedented and unexpected rise in gas and electricity prices over recent months has put energy markets under severe strain, we expect suppliers to continue to comply with their licence obligations and treat people fairly, including by providing support to vulnerable consumers. Where we see poor behaviour, Ofgem will be ready to step in and take swift action.”
What obligation do suppliers have to vulnerable customers? The obligation of suppliers is derived from the Home Heating Cost Reduction Obligation (HHCRO). This is a policy that is set up to help vulnerable households in the UK by ensuring energy providers have provisions in place to help them meet their energy needs.
“Under HHCRO, obligated suppliers must mainly promote measures which improve the ability of low income, fuel poor and vulnerable households to heat their homes. This includes actions that result in heating savings, such as the replacement of a broken heating system or the upgrade of an inefficient heating system“, states Ofgem.
The energy watchdog Ofgem also publishes monthly reports to give an overview of energy suppliers’ progress towards meeting their targets. The first of which was published in early 2019.
Has This Happened Before? Utility Warehouse is not the first supplier that failed in their customer obligations. Last year, Bulb had to pay £1.76 million in refunds, redress and goodwill payments because they were found to be removing vulnerable customers from the Priority Services Register. Customers were also overcharged or wrongly switched. EON also paid 55,000 to adversely affected customers after Christmas 2020 when they directly debited 1.6 million customers early.