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Energy Supplier Customer Service Hits Rock Bottom

In the latest of Ofgem’s biennial survey’s on energy consumers’ customer satisfaction, the fourth edition, the report has highlighted that rather than improvement, all but one of the Big 6 energy suppliers have seen their performance worsen over the period.

The key findings were:

  • Across the industry, satisfaction has fallen from 40% in 2012 to 30% in 2014.
  • The energy companies received in excess of five million complaints last year
  • Billing problems topped the list of complaint reasons
  • Customers had to contact their suppliers an average of six times before their complaints were resolved,
  • Over half of those who had complained (57% of domestic and 52% of small business consumers) were not satisfied with the way their complaint had been handled by their energy supplier
  • Nearly one in two customers had either already switched or planned to do so because of their complaints experience.
  • Satisfaction with Npower and Scottish Power had fallen particularly strongly, from 36% to 21% and from 44% to 20% respectively,
  • Only SSE managing to maintain levels of satisfaction found two years ago.
  • At Scottish Power and Npower just one in five customers who complained were satisfied with how it was handled.

Ofgem recommended that the focus of the energy suppliers needed to be on:

  • Improving the speed of resolving a complaint
  • Communicating better with consumers during the complaint process
  • Being more proactive in resolving complaints.

Presenting the findings, Dermot Nolan, Chief Executive of Ofgem said:

“These satisfaction scores are frankly awful. Almost all energy suppliers need to improve their complaints handling as a matter of urgency. There are real business benefits to good complaints handling schemes, and it shouldn’t need a regulator to tell companies about the importance of this.

“Suppliers must now tell their customers what steps they will be taking to put things right. We are already formally investigating npower about complaints handling and other customer service issues, and this should send a strong signal to all suppliers that, where necessary, we will take action.”

However, despite grabbing the headlines the survey revealed that it is not only the Big 6 energy suppliers that fail their customers with their standards of service. With Ofgem at pains to underline that the issue represented an “industry-wide failure” with almost 60% of domestic customers dissatisfied with the way problems are dealt with and half of them still upset when a supplier considers the complaint has been resolved.

Nolan took the increasingly common step of writing a letter to the energy suppliers to highlight the findings and prompt action. In the letter, sent to the Chief Executives of all active energy suppliers in the UK, Nolan said:

“The results [of our research] are unacceptable. I am therefore drawing attention publicly to these findings to leave you in no doubt about the need to act quickly to improve matters”.

The results of the Ofgem survey have been echoed by a recent Which? customer service survey of 100 companies that shocked even the most erstwhile customer services commentators.

The Which? survey found that not one of the Big 6 energy suppliers made it out of the bottom 20 of those surveyed and that:

  • nPower came 100th out of 100 surveyed
  • Scottish Power came 99th
  • SSE came joint 94th with BT and EE
  • ON and British Gas came joint 86th alongside Carphone Warehouse, JD Sports and Primark
  • Whilst EDF Energy came out ‘on top’ in joint 81st alongside the likes of DFS, Poundland, Poundstretcher and Vodafone.

For now energy customers can only dream of the service provided by the likes of First Direct, Lush, John Lewis, Lakeland and Waitrose, who made up the top 5 companies from the 100 surveyed.

Ofgem said that given the extent of the problems highlighted in the report and the findings elsewhere, not least the on-going CMA investigation into the energy market, that it would now conduct its next survey next year, instead of in 2016, and warned that companies could face penalties if they failed to improve.

Ofgem are requiring responses from each of the energy suppliers by 24th October and have left the suppliers on notice that their responses will be published by Ofgem and that they will be expected to publish their responses on their company websites AND “draw your customers’ attention to its content”.

First Direct energy anyone?

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