Your independent energy adviser
0800 051 5770

Ofgem abandon TPI Code of Conduct

Well well well. We’d pretend to be surprised but we’d not be at all convincing.

In a move no-one could possibly have predicted (Warning: sarcasm) Ofgem, the energy regulator, has given up on the idea of a TPI Code of Conduct and scurried away from long overdue action like a scalded rat or someone trying to avoid the bloke they started a row with in the boozer.

That such a move is no surprise is further evidence that the energy market simply does not have a fit for purpose regulator.

TPIs, Third Party Intermediaries, what were once known as brokers, are a mixed bunch.

Plenty are very bad, using cliched language, making outlandish claims and simply failing their customers.

Some are quite good.

Some are excellent.

We are a TPI, yet we are unique in our commitment to and performance on behalf of our customers.

We are proud to be different, proud to put the customer first, proud to work with the entire supply market and proud to be completely transparent in our dealings.

We however are not proud of our regulator and we are certainly not proud of their latest decision.

To refresh memories, Ofgem have long criticised the role of TPIs in the business energy market, only recently due to an independent report by consultancy Cornwall Energy have they begun to use phrases such as “they [TPIs] play an important role in the non-domestic [business] market” or that they “promote engagement”.

For a long time these views were alien to Ofgem and all TPIs were “tarred with the same brush”. Yet there was an anomaly. The myriad of complaints against a particular profile of TPIs went unheeded, Ofgem failed to act. Repeatedly.

But then something clicked and Ofgem took notice at last, only to then quickly focus on addressing the ‘whole’ TPI landscape rather than focussing on the miscreants.

That in itself wasn’t an issue, in fact we positively encouraged a whole of market approach to include any sale interaction with a business energy customer – whether that was through a TPI, an energy supplier or some other third party.

Ofgem however didn’t ‘quite’ see it that way.

Their code was to be just for TPIs, regardless of the two-tier standards that would inevitably result. Ofgem were unmoved on this issue. Their biggest contribution to effective competition was, in their opinion, to focus on ‘regulation’ of TPIs and TPIs alone.

Fine. You can’t win them all and if suppliers weren’t to be regulated under the scheme at least TPIs would and therefore at least some of the market would be duly improved.

Then however, despite the cogent and constructive support from many, Ofgem began the long inexorable delay that has ended in their latest announcement.

Along the way, Ofgem have dismissed a fully working code, implemented by E.ON in 2012 and decided to plough on regardless. Quite why is still utterly unclear, more so given a speedy adoption would have prevented this whole abandonment.

Yet Ofgem reverted to type, eschewing action, to consult, consult and consult. Working groups. Focus groups. Interim announcements. Internal consideration. All to nought.

So on Ofgem’s watch, bad brokers have been allowed to thrive. Good brokers have had to fight to survive. And Ofgem have utterly failed to differentiate between the two or to protect customers, TPIs and suppliers alike.

Ofgem’s hopelessness was already clear, this simply confirms it, although the bitter taste will take a long time to dissipate.

Having surrendered any last vestiges of authority in the energy market by referring the remit they are paid to regulate to the Competitions & Markets Authority, Ofgem have found that they to be the focal point of the investigation’s concerns.

Now Ofgem have followed up this indictment with inaction and at worst dereliction.

The official briefing on the abandoning of a TPI code of conduct talks of having:

“Decided to defer the planned consultation on the TPI code of practice until there is greater clarity”

Greater clarity? Four years of consultations? What else could they possibly need to know?

Compounding the insult Ofgem said, with apparently no embarrassment, that because someone else was now looking at it (the CMA, those people they called in to do their job) they weren’t going to bother after all:

“Since August, the scope of the CMA’s investigation into the energy market has become clearer and they have identified microbusiness customers and the role of TPIs in the non-domestic market as areas for further examination.”

In a move that could not possibly be justified, Ofgem unsurprisingly failed to do just that, comprehensively, claiming:

“We consider it appropriate to change our plans for the consultation on detailed governance around non-domestic TPI regulation [in order to]”:

  • Reduce regulatory uncertainty by clarifying external conditions before finalising our proposals for consultation; (In other words taking someone else’ word for it despite four years of consultation already have given them all the answers possibly needed)
  • Reduce the burden on industry by not asking for consultation responses where there is uncertainty over the approach and direction; (Despite having repeatedly covered the same ground, and failed to act, over the last half decade)
  • Ensure that proposed regulation takes into account the views of all stakeholders, (including the outputs from the CMA investigation), and delivers on our strategic consumer outcomes. (Stakeholders – the perennial excuse, un-named persons to whom all is aligned – the traditional cover for an unnecessary delay.

So there you have it, one of the few things that Ofgem could act upon following surrender of their authority to the CMA and they’ve blown it with nary an apology or justification of note.

And so sub-standard brokers live again, standards remain low, and quality businesses like ourselves fight another PR battle to win the trust of customers all over again?

But no! Ofgem have a solution. Simply come up with some meaningless buzzwords that even the worst businesses can adhere to:

  • Honesty: aka tell them who you are, (or purport to be)
  • Respect: aka at least be nice whilst you’re ripping the customer off
  • Accuracy: aka make sure the price you quote is real (even if it’s 5p too high)
  • Transparency: aka admit you don’t do it for free (no matter how much your website is plastered with “free service”)
  • Customer-focused: aka acknowledge your huge catalogue of complaints, (though no need to resolve them as its not your fault)
  • Professionalism: aka make sure your staff are fully trained in the finer arts of ripping off customers


Thanks Ofgem

Ed Miliband gets our vote all day long if he’s going to follow through on his promise to abolish the regulator. Nothing could be worse than this.