Ofgem takes action to secure improvements from Economy Energy

26 Mar 2014 11:45 AM

Ofgem has published its intention to confirm a provisional order for energy supplier; Economy Energy. The order sets out clear steps the company must take to resolve issues affecting customer complaints and the switching process. 

The action taken yesterday follows concern from both Ofgem and Consumer Futures about problems being faced by customers of Economy Energy. The supplier’s customer base is largely made up of prepayment customers and some have had difficulty in contacting the supplier to resolve issues, including how to get back on supply. Some customers were being unfairly blocked from switching away from Economy Energy to another supplier. 

The supplier has taken steps towards improving their services, however more needs to be done. As a result, Ofgem has taken the step of imposing clear instructions on how Economy Energy should conduct its business to ensure it complies with rules. These measures include reducing the time it takes to get a customer back on supply, extending their call centre opening hours and making sure that customers can switch away. It is because of the serious impact these failures have on customers that we have taken this action. Ofgem will continue to monitor Economy Energy’s performance against this order.

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Notes to editors

1.    Economy Energy

Economy Energy supplies around 50,000 customers, who are predominantly on prepayment meters, with electricity and gas across Britain. The decision to take this action is not a common practice by Ofgem. The decision to issue Economy Energy with an order reflects Ofgem’s concerns about customer welfare given the complaints and customer service failings. 

2.    Background 

A Provisional Order is a tool Ofgem has to either stop a company doing something or to require it to take specific action. A Provisional Order is used where behaviour needs to be changed as soon as possible, in order to prevent consumer harm. Were Economy Energy not to meet our requirements, we have powers to impose a financial penalty on them, or even ultimately to revoke their licence.

In February 2014, Ofgem set out steps that Economy Energy needed to take to ensure customers could get back on supply quickly and make sure that customers wanting to switch supplier were not unfairly blocked.  Economy Energy has taken steps to improve but was not able to demonstrate full compliance across all measures. Also, some improvements that the supplier did make have not been in place long enough for Ofgem to be satisfied that they will remain so. Today’s publication announces our intention to confirm this order, meaning the measures set out in the order will stay in place indefinitely. Ofgem will continue to monitor Economy Energy’s performance against this order.

You can read Economy Energy’s Provisional Order on our website.

3.    About Ofgem

Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's functions are set out mainly in the Gas Act 1986, the Electricity Act 1989, the Competition Act 1998 and the Utilities Act 2000. In this note, the functions of the Authority under all the relevant Acts are, for simplicity, described as the functions of Ofgem.

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