Economy Energy banned from taking new customers over poor customer service
Economy Energy has been banned from taking on any new customers for the next three months, or until it improves its customer service.
Regulator Ofgem says it's taking action against the firm as a result of declining standards of customer service, complaints procedures and billing and payment processes.
In September, thousands of Economy Energy customers were hit with an astonishing £300+/year price hike, sparking anger among some customers who'd been told their prices were fixed. We've since seen reports from ex-customers facing delays in receiving refunds for credit balances.
As well as not being able to take on more customers, the ban means the firm won't be able to increase direct debits or request one-off payments from its existing customers.
If it doesn't make the necessary improvements within three months, Ofgem could extend the ban or ultimately even revoke Economy Energy's licence to supply gas and elec.
If you're unhappy with your energy company's prices or service, do a comparison using our Cheap Energy Club to switch and save.
What improvements must be made?
Economy Energy must now take the following steps:
- Improve its customer contact procedures. This includes reducing average call-waiting times to two minutes and acknowledging emails within five working days. Any emails, web chats or social media communication received before today's order must be resolved by Friday 1 February.
- Address its billing and payment failures. Economy Energy must review its domestic customer accounts from 1 February 2018 onwards to make sure its billing processes have been transparent and provided accurate information. Where it identifies failures, it must re-evaluate accounts to address the issues.
- Issue customer refunds for credit balances. It must do this within 28 days of receiving a refund request, or within 14 days of today's order, whichever is later – or explain why the refund is not reasonable.
This is the fourth Economy Energy issue currently being investigated by the regulator. In September 2016, Ofgem began investigations into its selling practices and potential breach of competition law, and in November last year it began investigating a payment shortfall for the Renewables Obligation scheme, where suppliers that do not source the required proportion of electricity from renewable sources have to pay into a fund.
What does Ofgem say?
Anthony Pygram, director of conduct and enforcement at Ofgem, said: "Ofgem is taking action to protect customers from suffering more harm from the unacceptable level of customer service provided by Economy Energy."
An Economy Energy spokesperson said: "In light of the news received from Ofgem today, in which we are very disappointed, we wish to advise our customers we will be cooperating fully with Ofgem and are always committed to continual improvement of our business."