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"Spot on" - Martin Lewis backs new rules to stop energy firms antics causing 'nightmarish' problems

Mirror logo Mirror 13/06/2018 James Andrews

Martyn Lewis looking at the camera: Money will be coming your way for sure if things go wrong with your energy provider © Copyright unknown Money will be coming your way for sure if things go wrong with your energy provider Consumer champion Martin Lewis has praised new rules to protect customers from huge bills when energy companies make mistakes as "spot on".

The rules will see firms forced to pay at least £30 compensation if they make mistakes when you change providers, and ban them from sending out bills after you've left them.

"The idea that you shouldn't get a final bill very late after six weeks is absolutely spot on," Lewis, founder of MoneySavingExpert.com said.

"For too long, people feel that they've left an energy provider and moved on elsewhere, but then for up to a year later can find themselves hit by bills of £100s for outstanding energy because the company has not got its act together.

"That isn't good enough. It causes nightmarish budget problems and pushes some over the limit."

He also fully backed the idea that they should pay, rather than mistakes costing you.

"Quite simply, after six weeks an energy company should give you your final bill, and at that point if it later decides it has got it wrong and you owe more money, it should not have a right get it off you," Lewis said.

"They need to be more efficient, and if they're not, it's got to cost them."

The new rules

Energy companies will have to automatically compensate consumers who suffer problems while switching supplier under proposals announced by the regulator.

Ofgem said consumers would receive at least £30 in compensation for each switching problem they experience under the plans to boost protection and confidence in the process.

It said the compensation was intended to cover problems such as consumers being mistakenly switched to another supplier, known as an "erroneous transfer", or switches taking longer than 21 days to complete.

Automatic payouts could also be triggered by suppliers who are late to send final bills or refunding credit balances to customers who are leaving.

A very effective weapon

“Ofgem is also making it very clear to energy providers that they expect them to up their game," said Georgie Frost, consumer advocate from GoCompare Energy .

"It isn’t acceptable to sit on final credit balance refunds or take longer than 21 days to complete a switch. This could be a very effective weapon in helping drive the right behaviour from energy companies."

Ofgem said the new rules would give "peace of mind" to consumers that they will be compensated if something goes wrong when they switch and should also serve as a wake up call for suppliers to reduce the number of problems and boost consumers' confidence in switching.

The proposals follow research by Ofgem that found many people are put off switching because of concerns something may go wrong, especially if they have experienced a problem before.

It said that while the vast majority of switches go smoothly, more problems are occurring as an increasing number of people switch to get a better deal.

Last year, 5.1 million electricity consumers and 4.1 million gas consumers in total switched supplier, the highest number for almost a decade.

More change coming

In February, Ofgem approved a programme to overhaul industry systems by 2020 to allow people to switch by the next working day and reduce the number of switches which go wrong.

It said automatic compensation should be in place by the end of this year.

Rob Salter-Church, interim executive director of consumers and markets at Ofgem, said: "While the vast majority of switches go smoothly, too many problems are still occurring. These can cause inconvenience, and in some cases, real worry and stress for those affected.

"Today's proposals for automatic compensation will strengthen protection for consumers who switch, and should serve as an incentive for suppliers to get switches right first time."

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