The Ofgem Third party intermediary (TPI) working group met for their 2nd session on 20th October following the initial scoping phase in September 2014.
The session brought a little more clarity to the future arrangements of a TPI “code”.
Below we summarise the key ‘outcomes’ to date. No formal decision has been taken by Ofgem and the consultation continues however we are pleased to see that the discussions are proceeding along rational and auditable lines and that crucial parallels are being drawn with existing supplier arrangements.
The principle
Ofgem:
“A Code of practice underpinned by a licence condition on suppliers to work only with TPIs accredited to this code and governed by an independent board “
TPI definition
Ofgem:
“Our objective is for the code of practice to apply to any organisation that non-domestic consumers rely upon for information and advice for meeting their energy needs”
Current definition options are:
- “a non-domestic TPI is an intermediary engaged in direct or indirect activities between a non-domestic consumer and an active energy supplier”.
- “an intermediary between a non-domestic consumer and an energy supplier, providing advice and assistance to the customer in relation to their energy needs”.
Regulatory framework
- Ofgem will have ultimate oversight for the content of the code and will define the initial content of the code and agree any changes,
- An independent board overseeing the ongoing day-to-day management of the code, including, amongst other things monitoring of code compliance,
- Ofgem will develop and consult on proposals for the accreditation process, approach to non-compliance, monitoring and funding and will reflect the final arrangements in the drafting of the code,
- The responsibility of individual suppliers will be to confirm that a TPI they work with is accredited under the code.
Impact assessment
Ofgem:
“We are currently of the view that our proposals will add value across the entire non- domestic market and, based on current information, will not undermine the competitive I&C segment of the market”
Complaints:
To be defined as ‘any expression of dissatisfaction’
Complaints should be tiered in bandings such as:
- Marketing Nuisance calls / Misleading advertising / sales pitches
- Misleading claims –during the sales process
- Remuneration – transparency of the remuneration of TPI.
- Execution of contracts – unclear
- Renewals – unclear
The reporting of complaints is intended to mirror the approach adopted by the Energy Ombudsman with regards supplier complaints.
The underlying complaints processes of a TPI should be visible, resolved in justifiable timescales (TPI dependent) and should see issues being raised with the TPI in the first instance.
Post-sales complaints to be the remit of the suppliers, not TPIs
Breaches:
- Complaints and breaches are different
- There doesn’t need to be a complaint to investigate a breach
- The code panel would categorise a breach as either minor or major
- The key principle should be ‘if there is a breach, there is a sanction’
Sanctions:
- A written warning
- Fines
- Suspension from the code.
- Increased frequency of audit
- Expulsion from the code.
Code administration
- The independence of the code board will be key
Links
- Business Juice’s responses to the latest market consultations
- Business Juice’s customer charter
- A sample of Business Juice’s unique key facts document made available to all our customers
Note:
Business Juice was asked to be members of this grouping given our success in lobbying for market improvements such as the ending of rollover contracts amongst the Big 6 energy suppliers and our work with the Number 10 Downing Street SME Energy Working Group.
This invitation however was declined as we felt that whilst we support much of the group’s intentions, little value would be garnered from the sessions and that our priority as a business must continue to be to lead the market by example and not engage in a long drawn out discussions in lieu of action.
We however remain available for Ofgem and the grouping itself for ‘thought pieces’ and advice and remain focused on ensuring that the ultimate beneficiary of the proposed code is a fairer competitive market for business energy customers. If that is indeed the outcome we will wholeheartedly support the decisions reached.