Small energy supplier Iresa is facing what is essentially an indefinite ban on taking on new users as it is failing to meet customer service targets laid out by regulator Ofgem.
Back in March, Ofgem issued a 'provisional order' barring Iresa from signing up new customers, increasing existing customers' direct debits, and asking them for one-off payments until it meets a number of service targets laid out by the regulator.
The original ban was put in place for up to three months, and with three weeks left to go, Ofgem has now issued proposals to extend the ban, stating that Iresa has not taken adequate steps to improve its service.
The firm, which has about 100,000 customers, now has until Thursday 21 June to respond or object to Ofgem's proposals, or face a longer, indefinite ban - until it can prove to the regulator it has met ALL customer service targets the regulator set.
Furthermore, there is a separate, ongoing investigation looking at whether Iresa broke the rules relating to customer service and customer contact.
In January, we reported that Iresa had suddenly hiked some customers' direct debits by up to 20% and some were facing long call times when trying to get through to customer services.
We've also long warned about Iresa's customer service issues in our Cheap Energy Club.
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What did Ofgem order Iresa to do and why?
When announcing the original ban, Ofgem said it had seen substantial information to suggest Iresa risks causing harm to consumers owing to its customer service processes.
As a result, the regulator ordered the firm to improve the service it provides to its customers. The improvements include:
- Extending call centre hours and bringing down average call waiting times to below five minutes
- Responding to customer emails within five working days and responding to customers who request a call back by the end of the next working day
- Clearing a backlog of consumer emails
- Logging and recording all expressions of customer dissatisfaction
- Acting to manage and identify all of its vulnerable customers, including offering to put them on a priority services register
How has Iresa failed to meet these targets?
In its new proposals to extend the ban, Ofgem looked at how Iresa has performed on the required improvements:
- On call waiting times the regulator found that while they have started to reduce, this wasn't for a consistent period of time and the reductions coincided with times when call volumes were low.
- On email and web tickets Ofgem said its processes remain at 'unsatisfactory levels'.
- On its backlog of emails the regulator said it remained concerned as the supplier could not provide an exact number of outstanding emails in its backlog.
- On complaints and vulnerable customers Ofgem said that while a new complaints and vulnerable customer process has been implemented, it has no evidence to suggest that this will be beneficial for customers.
As a result of these findings, Ofgem says the supplier 'has not taken adequate steps' to meet the targets set out for it, and in failing do so it will fall short of its licence conditions.
Iresa now has three weeks to challenge the latest proposal - though if Ofgem fails to receive any evidence to change its current position, it will extend the ban indefinitely until Iresa can prove it has met all of the required improvements.
The current ban on Iresa runs out on Wednesday 27 June, so it's likely Ofgem will confirm whether this will be extended, and any other action, before then.
What does Iresa say?
A spokesperson for Iresa Energy said: "We are extremely disappointed by Ofgemís decision to give notice of their intention to confirm the provisional order. Iresa remains committed to providing the best quality service to its customers at low prices.
"We have been working closely with Ofgem and will continue to do so to ensure any concerns they have are addressed and resolved as a matter of urgency. In the meantime, we apologise to our customers for any inconvenience this situation has caused."