18th June 2015
Around a fifth of UK households lodge a grievance against their energy provider every year claims a new report from Citizens Advice.
The research found of the 20% who complain, the biggest issue was billing, which the charity estimates costs suppliers around £125m a year to handle.
The study entitled, The Lost Decade, analysed measures which have been taken to improve the situation in the decade since the launch of a billing super-complaint.
The most basic function of an energy supplier is to manage customers’ accounts properly, the report said but despite this it described progress on billing performance as “patchy”.
It added that poor processes are still prevalent, which has led to widespread distrust amongst consumers. One of the main reasons for the rise in billing problems is due to difficulties that arose when some suppliers changed billing systems. These caused major customer service failures as well as delayed bills and the build-up of debts.
Citizens Advice said it helped with more than 100,000 energy related issues in the past year, with local offices of the charity reporting a significant 27% increase on problems compared to the previous 12 months.
Gillian Guy, chief executive of Citizens Advice, said: “Bad billing systems have plagued energy customers for years. Billing people on time, and for the right sums of money, is essential if the market is to work. It is both astonishing and wholly unacceptable that suppliers have been getting it so wrong for so long.
“The introduction of smart meters can significantly improve consumers’ experience – the responsibility is now on suppliers to get it right and for Ofgem to bring forward new protections if things go wrong.”
Citizens Advice says the introduction of smart meters, which will be rolled out by 2020, have the biggest potential to solve many of the billing problems. But the report warned that unless suppliers get their own house in order this could be undermined.
The Citizens Advice report has recommended that the energy regulator, Ofgem, reviews why the pressure of competition and regulatory requirements has failed to bring down billing problems. It also wants Ofgem to address the issue of complicated bills by working with customers to understand what information they need and removing unnecessary information from bills. In addition it wants the organisation to deliver improved protections for consumers through new regulations limiting back-billing for smart meter customers to three months.