Tuesday 7 November 2023

Ofgem’s new guidance on fair treatment for business customers

Ofgem’s new guidance on fair treatment for business customers

Ofgem has sent letters to all non-domestic energy suppliers to remind them of their obligation to treat business customers fairly.

This move comes in response to concerns raised by many customers and trade groups regarding the fairness of "deemed rates" - variable tariffs charged to customers who have not agreed to a specific energy contract, typically when moving into new premises.

Ofgem has recently concluded a review of the non-domestic energy market and has now published guidance outlining its expectations for suppliers concerning deemed contract pricing.

The regulator aims to ensure that customers are not overcharged on these rates.

In addition to this guidance, Ofgem has issued draft guidance that highlights examples of poor behaviour in the non-domestic market and how it violates the regulator's existing Standards of Conduct.

These standards are designed to ensure that suppliers treat customers fairly by maintaining good practice in various aspects, such as clear and honest communication, efficient customer service, and support for vulnerable customers.

In the letter, the energy regulator said: "Given the challenges many businesses are still facing, it is critical no customer this winter pays more than they should. Following our recent investigation into how suppliers are pricing their deemed contract rates, and after consulting on draft guidance, today we are publishing our final Guidance on Deemed Contract rules.

"This means suppliers can review their current processes and satisfy themselves they comply with the licence condition as soon as possible.

"The rules require suppliers to ensure their deemed contract terms are not unduly onerous. We will not hesitate to act where we suspect suppliers are not complying with the rules."

Written by

Sumit Bose

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