OFGEM Investigation in to the Energy Market
OFGEM, the Government Regulator for Great Britain’s Electricity and Gas markets have recently launched an investigation related to barriers of competition in the energy market under the backdrop of increased profits of the leading energy providers and sharply declining consumer confidence. Among the reasons for low consumer confidence is the common practice of energy providers to increase prices for customers who have not switched.
As OFGEM doesn’t have extensive enough powers to address the whole issue, it has referred this case to the Competition and Markets Authority (CMA) to make further investigations and establish a long term solution to help consumers regain confidence. This could mean that the “Big Six” energy suppliers could be split up to create a fairer market.
A month after the announcement, OFGEM started fining energy suppliers for mis-selling their services or for preventing customers from switching.
Recently, British Gas was ordered by OFGEM to pay a penalty and redress of £5.6 million for having blocked business customers from switching suppliers.
E.ON was issued with the most recent and at the same time highest penalty to date of £12 million which was for mis-selling to vulnerable customers which took place between June 2010 and December 2013. E.ON will pay £35 to 330,000 households that receive their “Warm Home Discount” and will write to another 465,000 customers to advise them how to complain if they believe they were treated unfairly. So look out for a letter from E.On if they supply your energy.
We believe this isn’t the last we’ve heard from OFGEM as more dubious practices get uncovered. In the meantime, consumers are advised to frequently switch energy providers to ensure they are not overpaying for the energy they are using.
Here at Switchwise, we are trying to make the switching process as easy as possible for you. We have an easy to use guide on our website on “How to Switch Energy Providers” or pop straight to our postcode checker so you can start comparing immediately.
Try it out now! Use estimates if you don’t have usage details to hand.