Ofgem customer service reforms: how energy supplier rules may change for complaints and help with energy bills

Ofgem has announced a series of potential reforms that could force energy suppliers to improve their customer service standards as well as provide more support to households who are struggling to keep up with bills amid the cost of living crisis.

Accusing energy firms of “short-changing” their customers, the regulator said its proposals would make consumer welfare a top priority whilst also cracking down on the “poor behaviour” of the big gas and electricity market players.

It comes after Ofgem fined several operators for “unacceptable” customer service. Poor call handling times and supplier switching failings saw leading suppliers forced to make six- and seven-figure payouts to bill payers earlier this summer. Some firms were also found to have overcharged their customers.

Alongside the latest proposals, the regulator has brought in a policy change that will mean energy providers have to have a minimum amount of cash set aside if they are to operate in the UK. It is hoped the new rules will help the UK avoid a scenario akin to the one seen at the end of 2021, when Bulb and dozens of other energy providers were put out of business by the first wave of energy price shocks.

So, what exactly has Ofgem announced - and what could it mean for you? Here’s what you need to know.

What are Ofgem’s energy supplier proposals?

On Wednesday (26 July), Ofgem unveiled a set of proposals that it believes will force energy firms to improve their consumer standards. While these reforms are now set to go through a consultation process, the regulator hopes to have them in place by December.

Under the plans, suppliers would have to keep phone lines open longer, for example into evenings and over weekends. They may also have to be easier to reach over email, webchat or other digital mediums, and ensure that they have 24/7 emergency support in place for people who have had their power unexpectedly cut off.

Providers may also have to provide better support for customers who are struggling with their bills. The proposals would compel them to identify and work with households facing difficulties at an earlier stage than they currently do, offering up schemes like temporary repayment holidays. Alongside these changes, suppliers would also have to improve their handling of vulnerable customers.

Those who are debating whether to switch suppliers may see changes too. Ofgem is considering compelling energy firms to make information on their customer service performance available to the general public in the hope that it will drive up standards.

Explaining its intervention, Ofgem said data from a survey of 3,000 people in Great Britain that it had conducted with fellow public body Citizens Advice had shown consumer satisfaction with the customer service offered by energy suppliers had fallen from 74% in 2018 to 66% in 2022.

“Suppliers are short-changing too many of their customers, who deserve better,” said Ofgem director Neil Lawrence. “Customers need more support when they are struggling and should be able to contact their supplier without frustration or undue delay when they need help.

“The plans we are announcing put the welfare of business and domestic consumers first and set out a comprehensive package to tackle poor behaviour by energy suppliers. Good customer service is important for all consumers, but it can make a critical difference to welfare and the safety of the most vulnerable.

“While we have seen good practice from some suppliers, we expect every company to raise the bar to provide a consistent service that customers can rely on – and this mission should be driven from the top. We believe these recommendations can make a positive difference to consumers and we aim to have changes in place before the cold winter months return.”

Reacting to the announcement, senior personal finance analyst at Interactive Investor, Myron Jobson, said the reforms made it “unequivocally clear” that suppliers should be performing better.

“When people are struggling to make ends meet, they don’t need additional headaches from their energy providers. They need support, guidance, and a helping hand to navigate through the murky waters of bills and payments,” he said.

“That’s where good customer service comes in, serving as a beacon in the cost-of-living storm. It provides reassurance, a sense of security, and empowers customers to manage their energy usage better.”

What else has Ofgem said?

Alongside its plans for households, Ofgem has also announced that suppliers will face “minimum capital requirements” to ensure greater stability and resilience in the energy market.

Coming into effect from 31 March 2025, all suppliers will have to show the energy regulator that they have enough money set aside so that they can weather price shocks. It comes after Ofgem CEO Jonathan Brearley warned providers that his organisation would act against them if they did not have a sufficient amount of cash set aside but were paying out dividends to shareholders.

In late 2021, 30 suppliers failed when wholesale gas prices sharply rocketed as a result of post-Covid demand. The crisis was largely down to smaller suppliers not having enough spare cash to protect themselves from sudden price hikes.

Meanwhile, Ofgem is also looking into reforms relating to business energy supplies. It said it wants to see better business customer complaint handling from gas and electricity suppliers, as well as greater protections for smaller firms. However, the regulator’s remit needs to be altered by the government before it can act.