MRASCO the guardians of the Master Registration Agreement (MRA), the document that governs the rules that enshrine a customer’s ability to transfer energy supplier, have ‘agreed’ with suppliers to severely limit the efficiency of the business energy market.
That is the implication of a ruling made by the MRASCO Development Board in response to a request from EDF Energy to remove the right for a customer to use a five working day window to challenge their existing supplier where they have ‘objected’ to the transfer of their energy supply to a new company.
The existing supplier can, in the following circumstances, legitimately raise an objection:
- Where debt remains on an account that will not be cleared by the next invoice payment
- Where a contract already exists for the date for which a transfer has been applied
- Where an incomplete ‘set’ of meters has been applied for
The existing energy supplier has five working days from receipt of the data flow informing them of the application for a transfer of the meter to raise an objection in an attempt to block the intended switch.
In many cases this is a legitimate preventer of erroneous transfers however equally suppliers can use the objection window for nefarious means such as undertaking ‘win-backs’.
This is where the customer is ‘persuaded’ to stay with the supplier and a contract is claimed to be in existence to enable an ostensibly legitimate transfer blocking objection to be raised, thereby stifling competition.
This is a common and well known industry problem and one that Ofgem have made a key focus in their Retail Market Review, unfortunately MRASCO, and GEMSERV, the private company that runs it, apparently do not share this view. Rather than placing a limit on the time that it affords suppliers to raise an objection they have set that five working day period in stone and instead placed all burden of proof and responsibility for ‘overturning’ an objection on the customer.
Added to this they have unilaterally slashed the previous five-day objection resolution window, the window that affords the customer time to overturn the objection, to just one working day.
The upshot is, that if your chosen transfer to a new energy supplier is one of the estimated 40% that are objected to, the likelihood of your issue being resolved in such a timescale is next to zero. In one go, MRASCO have overseen greater damage to the competitive energy market and neutralised any of the positive steps that have been trickling out of Ofgem’s RMR to date.
We have challenged MRASCO and the suppliers on this issue and attempted to understand the logic from this move. The responses have been interesting. MRASCO’s response showed, in our opinion a lack of a holistic view of the true impact of the modification:
- The driver of the modification was to ensure speedier transfer of supply for customers
- No consideration or timescale is or was in place to similarly reduce the supplier objection window despite the driver
- No customer focus group was consulted on the change
- The industry however did undertake a full, internal impact assessment
- This consisted of the Big 6 energy suppliers, Distribution Companies, and a small supplier representative
- No apparent consideration was made of the trade off between shortened timescales and increased transfer failures
- The body did not consider the failings of suppliers to communicate the reason for just 3% of objections being overturned in the objection resolution window and instead simply viewed the 5-day window as “dead-time” in the registration process
- MRASCO were not aware of the contractual obligation on suppliers to communicate an objection to a customer and did not consider this as an issue in reaching their decision
Suppliers, complicit in the decision, were however totally unprepared for the change to the detriment of their customers:
- No prior consideration had been given to ensuring supplier communication of an objection would be received in advance of the 1 day resolution window!
- No uniformity of content and medium of objection notification were considered to ensure a fair process!
- No alteration to the current supplier Service Level Agreements (SLAs) had been considered to reflect the reduced timescales available to customers to overturn the objection!
- No consideration of the impact of the inevitable increase in failed transfers on the competitive energy market and customer experience had been made!
We truly believe this is one of the most misguided and ill thought through modifications ever to be put through the industry, the fact that is has been codified without any seeming awareness let alone consideration of the consequences displays, in our opinion, an appalling lack of judgment.
If anything the objection resolution window should have been increased, indeed Business Juice called for this to happen in our RMR response. Furthermore it was and remains imperative that the causes of the imperfections of the registration process, namely the mis-use of the objection window by suppliers, remain a key focus of the RMR. Rather than take this lead, MRASCO have seen wisdom in ensuring an objection, erroneous or otherwise, will result in a failed transfer and poor customer experience.
The fact that suppliers are simply not geared up to the significant increase in failed sales that this will bring and the inevitable customer dissatisfaction and compensation claims that will arise is startling. For now however things will be left to TPIs and customers to clear up the mess.
Business Juice’s advice is:
- Always complete your Letter of Authority and return it to Business Juice as soon as practicably possible.
- If an objection is raised by your Existing Supplier to your switch to your New Supplier you should expect to receive correspondence from your Existing Supplier informing you of:
- The objection
- The reason for the objection
- What you must do to resolve the objection
- You will have 1 (ONE) working day to resolve these issues.
- We recommend that you contact Business Juice immediately that you receive this information. This way we can recommend best courses of action and if possible act on your behalf to resolve the issue.
- You should always settle all outstanding monies for your account immediately prior to if not before 28 days in advance of your chosen Contract Start Date in order to clear your debt and enable your transfer to your New Supplier to proceed
- You should always ensure that your existing supply contract ends before your chosen contract with your New Supplier commences
If you fail to resolve the issues within 1 (ONE) working day your application for transfer to New Supplier will require reapplication and could result in:
- A delay to your chosen contract start date with your New Supplier
- Your contract price from your New Supplier being withdrawn and a new price being required
- Exposure to out of contract rates from your Existing Supplier whilst you await your revised switch date to your New Supplier
At times the energy markets confound even our low expectations, this is one of those times, where a decision, bereft of even an ounce of merit has made the business energy market significantly more challenging for those who should be the centre of any beneficial decision making, the customer.
Does that mean interaction with the business energy market is not worth it?
No not at all, despite the seeming best efforts of some industry parties, the competitive market where a business can strike a great deal for their future energy costs is still alive and well.
Does that mean there is a maturing, customer centric focus out there?
Not on your nelly. In the meantime it is crucial to work hand in glove with your energy broker to ensure you get the deal you want and to see your chosen supplier deliver on their promises. Failure to properly engage in the business energy market has never been so costly. On behalf of all UK businesses… thanks a lot MRASCO.