Watchdog extends new customer ban on troubled energy supplier Iresa

Ofgem extended its initial three month ban on Iresa, which has been in place since March, after finding it has failed to resolve all of its customer service issues.

It says it could revoke Iresa's licence if it does not make the improvements set out in the extended ban.

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What does Ofgem say?

As part of the initial order, Ofgem set targets for Iresa to improve its customer service including extending call centre hours, improving call waiting times and responding to customer emails more quickly.

If Iresa had met these the ban could have been lifted, but Ofgem has found that although it has reduced its call waiting times it's not made enough progress in reducing the backlog of customers' emails.

Iresa is also starting to show some improvements in how it handles complaints and how it manages its vulnerable customers, but Ofgem says this is not currently good enough and hasn't been sustained for a reasonable period of time.

Dermot Nolan, chief executive of Ofgem, said: "Iresa continues to let its customers down by failing to provide a level of customer service its customers deserve.

"Although it has made some improvements since we issued the provisional order in March, the supplier has been unable to meet all the requirements we set it three months ago to get its house in order.

"Ofgem will step in to protect consumers if any supplier fails to provide a satisfactory level of customer service and will take firm action against those flouting the rules, which could include a supplier' licence being taken away."

'Take poorly perfoming companies out of the market'

Today's announcement coincides with research from Citizens Advice which also puts Iresa bottom of the pile for service for the first quarter of the year, and is calling for tighter regulation of smaller suppliers – an area that Ofgem is currently reviewing.

Toto Energy also scored poorly in the report and, as we revealed, many customers have been plagued with nightmare service.

The latest report from Citizens Advice - which compares customer service scores using a five-star rating system for providers with at least 50,000 accounts - saw Iresa in last place, with Toto Energy, Robin Hood Energy and Avro all with poor rankings. Conversely, So Energy, Engie and E took the top three spots.

Small suppliers were also found to be leading the way from our latest energy customer service poll, though Avro scored much higher with MSE users.

The Citizens Advice scores are based on customer service and the average call wait time, how accurate bills were and how quickly they were sent out and the proportion of switches completed with 21 days.

Commenting on the results, Gillian Guy, Chief Executive of Citizens Advice, said: “It’s vital now that Ofgem does more to protect consumers from poor customer service. The regulator’s upcoming review of licensing rules must do two things: make it easier to stop unprepared suppliers from entering the market, and take poorly performing companies out of the market faster.”

What does Iresa say?

A spokesperson said: "Our customer service team has trebled in size and our call centre is now open longer to improve our availability. 

"Our plan is to continue to improve our level of service across all areas, and we will continue to work with Ofgem to give them the confidence to remove the order at the earliest opportunity. 

"In the meantime, we would like to apologise to our customers for any inconvenience this situation has caused, and thank them for their patience during this time."