MANY thousands of households could be missing out on compensation from their energy suppliers, according to newly released data (October 22).
Under current rules the energy companies are expected to answer consumer complaints within eight weeks – after which the Energy Ombudsman can direct them to pay compensation.
On average, consumers who refer their complaints on to the Ombudsman receive a compensation payment of £100.
But with just five per cent of eligible customers – that’s one in 20 – actually pursuing their complaints with the Ombudsman, Labour estimates many thousands of consumers are missing out on compensation they are entitled to.
Shadow Minister for Energy and Climate Change Jonathan Reynolds MP says consumers deserve to receive an effective service in response to their complaints.
He believes action should be taken to ensure customers – households and small businesses - know they have the right to refer their complaints to the Energy Ombudsman. And he says action is needed to ensure consumers are not mistreated by their suppliers.
He said: “The fact that the number of complaints about gas and electricity services has shot up this year indicates that this is a market that is failing to meet the needs of its customers.
“The vast majority of registered complaints relate to billing errors – which can cause serious and extreme hardship to consumers. Yet the energy companies are failing to deal with complaints quickly or effectively enough.
“Data suggests that many thousands of people could be eligible for compensation as a result of delays or poor customer service, but they are simply failing to claim.
“A Labour Government would take urgent action to reform the energy market – but in the meantime I would urge consumers to pursue their complaints with the Ombudsman to ensure they receive the redress they are entitled to.”
In the year 2013/2014 the most common cause of complaints to the energy companies were related to billing (82 per cent), followed by transfers (13 per cent) and then sales (3 per cent).
So far this year there have been 37,061 complaints accepted by the Energy Ombudsman. However a report commissioned by the regulator Ofgem in December 2013 concluded that just five per cent of eligible cases were referred to the Ombudsman – which means the actual number of eligible complaints could be as high as 741,220.
Last year 95 per cent of complaints to the Ombudsman were upheld – with 76 per cent receiving financial compensation too.
At the Energy UK conference today (October 22), Labour’s Shadow Energy and Climate Change Secretary Caroline Flint, who uncovered the figures, warned that companies who repeatedly mistreat customers could lose their licences under a Labour Government.
She said: “It’s bad enough when the public have cause for complaint with their energy supplier, but for energy companies to refuse to compensate consumers or string out the complaints process for months on end is completely unacceptable.
“These figures lay bare the full scale of poor customer service and public dissatisfaction with the energy market.
“That’s why the next Labour Government will freeze energy prices until 2017, reform the energy market and create a tough new regulator with the power to strip energy companies of their licences if they repeatedly mistreat customers.”