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Automatic compensation for energy switching woes

By James Sillars, business reporter
Proposals have been announced that would force energy suppliers to automatically compensate customers if their attempt to switch provider goes wrong.
Ofgem said it wanted households to receive at least 30 for each switching difficulty, saying "too many" consumers were encountering problems.
These included, the regulator said, people being mistakenly switched to another supplier, switches taking longer than 21 days to complete and providers taking too long to refund credit balances.The watchdog and consumer groups say switching remains the most effective way of cutting bills - often by hundreds of pounds a year - as the government moves to crackdown on standard variable and default tariffs through a planned cap.:: Tougher Ofgem rules to knock 5bn from energy billsOfgem said its plans were part-based on research which found many are put off changing supplier for fear of something going wrong or because of previous bad experiences.
Automatic compensation for energy switching woes

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Energy bills are rising again as wholesale gas and electricity costs are higher than in 2017
The regulator said that while the vast majority of switches do go smoothly, it was important to provide "peace of mind" to consumers financially.It hoped the threat of compensation bills, intended to be in place by the end of 2018, would also serve as a wake up call to energy companies.Rob Salter-Church, interim executive director of consumers and markets at Ofgem, said: "While the vast majority of switches go smoothly, too many problems are still occurring."These can cause inconvenience, and in some cases, real worry and stress for those affected."Today's proposals for automatic compensation will strengthen protection for consumers who switch, and should serve as an incentive for suppliers to get switches right first time."
The compensation measure forms part of the watchdog's efforts to bolster switching, which hit record levels last year as the so-called "big six" firms came under pressure on default tariffs.:: Ofgem imposes ban on catch-up energy billsAs the Government continues to seek a cap, expected by this coming winter, the cost of energy bills has been rising as raw energy prices have increased.Companies have also cited a growing cost of government energy initiatives as a reason for raising standard prices.Richard Neudegg, head of regulation at uSwitch.com, responded to Ofgem's plans by saying: "With record switching rates and savings of up to 491 on offer, households are benefiting from the huge choice available in the UK energy market."The vast majority of switches go through without any issue. However, any moves which provide further reassurance and engage more consumers so that they can find better deals are a positive step forward for energy customers."However, MoneySuperMarket's energy expert Stephen Murray, warned there could be an unintended consequence of such protections.
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He said: "Against the backdrop of switching numbers going up month-on-month, and the increasing advocacy of the Energy Switch Guarantee, it is perhaps necessary to question if these are the right priorities for Ofgem.

"Many of the switching issues customers incur are due to industry system and data challenges, for which many suppliers
work to overcome."If they are now to be penalised for taking a little longer, in some cases, then this could lead to many switches being rejected and thus customers missing out."
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