New Proposals to Beef up Protection for Small Business Customers
Energy regulator Ofgem has unveiled proposals to give small businesses better protection in the energy market. The proposals are part of reforms Ofgem will introduce following its energy supply probe. They are aimed at micro-businesses – companies that have fewer than ten employees or one of a number of other characteristics. The proposals include a ban on the automatic roll-over of fixed-term contracts which has resulted in some businesses being locked, without being aware, into unfavourable long-term contracts.
Other key provisions are: a proposal to work with Consumer Focus to widen its switching website accreditation scheme to cover sites which compare business energy deals; new standards for business contracts meaning suppliers must provide, in writing, a full copy of contract terms and conditions each time a customer signs, and they must highlight key terms and conditions such as the availability of any cooling-off periods; and recommendations that energy brokers and advisors develop existing or new codes of practice with guidance from the Office of Fair Trading and ensure that accredited brokers explain to customers how they are funded and which suppliers are covered by their services.
Ofgem Chief Executive, Alistair Buchanan, said:”Our investigation showed that small businesses are being woefully served by energy suppliers. This has to change. We anticipate that the package of measures we want to introduce will improve business customers’ ability to engage effectively in the market.”
Ofgem’s proposals are part of a package of remedies to improve the experience of domestic and business customers in the energy market. Today’s proposals include other measures that Ofgem wants to introduce to improve protection for household customers. Alongside today’s proposals, Ofgem is amid consultation with stakeholders on the drafting of licence conditions to ban unjustified price differences between payment methods for domestic bills. Stakeholders will have until the end of May to respond to the package of the proposals announced today.
Ofgem aims to have all the rule changes in place for domestic and business customers for this autumn.