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 Ofgem told to help consumers

 

Thursday, January 17, 2002


Ofgem has come under attack from MPs who have levelled a whole catalogue of concerns, complaints and misgivings about the energy regulator. Since the opening up to competition of the energy industry, it has been possible for consumers to make substantial savings on their electricity bills by switching to an alternative supplier. But according to MP's the regulator has not done enough to promote switching, or to ensure that it is easy for people to do.

The report on which the complaints are based reveals that by June 2000, around 19 million customers had not yet taken the opportunity to switch suppliers, despite potential savings of £670m or 13% from the average yearly bill.

Whilst acknowledging that a further 3 million customers have switched since the report was compiled, Edward Leigh MP, was adamant that much more could be done to improve the availability and clarity of information: "Without a maths degree, it is very difficult for consumer to determine which company is best for them. Ofgem must urgently find a way for people to be provided with clear information to use as a basis for making decisions. Without this, domestic electricity competition can never fully succeed."

Other complaints aimed at Ofgem include:

  • Failure to stem the flow of more than 200 complaints each month regarding high pressure or misleading sales techniques.
  • Failure to help low-income groups by promoting alternatives to prepayment meters and stimulating competition in this sector of the market..
  • Failure to find a practical solution to "debt blocking"m, which sees people prevented from switching suppliers because of outstanding bills that can be as little as £5.

MP's believe that the sum total of these problems mean that the market is not yet ready for the removal of price caps, which is planned for this April. The inference is that there is too much bad practice prevalent in the industry to be able to trust rogue electricity companies from abusing the new freedom. Adam Scorer, energy spokesman at the Consumers' Association, said: "We think it would be premature to lift remaining price controls. Prices have come down since deregulation, but for those people on prepayment, competition has brought relatively few benefits. There is no reason to think that competition will step in and ensure that vulnerable consumers benefit. They must not be lifted."

 
 
     
     
 

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