Fresh from their Ovo Energy interest payment debacle Ofgem have claimed victory in the long running saga of customer balance-gate.
The Big 6 energy companies, with the spectre of the CMA investigation into the energy market hanging over them like the sword of Damocles have committed to refunding their former customers for balances remaining on their energy accounts.
The total sum owing is believed to be as much as £153m and is an issue that is estimated to affect around 10% of the nation’s energy users built up over the last 6 years.
Dermot Nolan, Ofgem Chief Executive, in welcoming the announcement said:
“Today’s industry announcement is an encouraging first step by the six largest energy companies to address Ofgem’s call to reunite customers with their cash. It is good news for consumers and if you think you could be owed money we recommend that you contact your previous supplier.
“This issue is part of a wider challenge of delivering good customer service that the industry must crack if they are to rebuild customer trust and confidence. And while Ofgem welcomes the progress made to date, suppliers must now do everything within their powers to return the money and prevent a similar situation from happening again. Failure to deliver on the initiatives announced today could trigger further action by Ofgem, including enforcement.”
Not only will this new approach return the outstanding cash balances to their rightful owners, it will also ensure that build up of such balances in the future are avoided.
In addition in the instances where a customer cannot be traced any unattributed balances will be paid into a vulnerable customer fund.
Angela Knight, soon to be retiring Chief Executive of Energy UK explained:
“From now on, after two years, any monies remaining from unclaimed credits will be put towards funds to help the fuel poor and vulnerable. This will amount to at least £65 million over five years. Suppliers will kick start this new deal with £38 million for 2014 and 2015 combined”.
Currently although this enlightened policy only applies to domestic energy customers there exists ‘commitment’ within the industry to extend these measures to business energy customers.
Given the average outstanding consumer balance is £50 on average bills of £1,000 or 5% the potential monies owing to UK businesses could prove very significant indeed and a welcome boost to SME cash flow, albeit 6 years in the making.