Ofgem clamping down on bad energy suppliers: In order to continue operating as normal energy suppliers will soon have to meet certain criteria.
New requirements for suppliers have been released by Ofgem in an effort to drive up customer service standards.
The requirements include checks for all suppliers as well as growing suppliers, to make sure they can meet their financial obligations and are able to effectively serve their customer base.
Ofgem could stop them from taking further customers on, if they are not able demonstrate this.
There are also plans to introduce new licence requirements in the event of supplier failure to minimise the cost and disruption to the wider market from the regulator.
For example, in the case of failed suppliers, when administrators take over, they will have to offer, as active suppliers, customer protections regarding debt collection to former customers.
In the event that they fail, suppliers would also be required to have plans in place to minimise the cost, which is mutualised across other suppliers.
Executive Director of Consumers and Markets, Mary Starks said: “Energy suppliers have been at the core of the industry response to the Covid-19 crisis, protecting customers and the energy supply of those most in need.”
“Now more than ever we need to ensure that suppliers are set up in the right way to treat customers fairly and meet the challenges of today’s energy system.”
The new rules set out in the statutory consultation are expected to come into force this winter.
Ofgem clamping down on bad energy suppliers