Switch Your Supplier - ET or OTT?

Andrew Hancock

14 May 2019

Tilix are delighted to repost articles (with permission) from our associates. This is a remix of Switch Your Supplier - ET or OTT? from Andrew Hancock.

Phase 1 of the new Guaranteed Standards of Performance for Switching (GSoP) has been introduced. The situations in which GSoP for Switching payments apply are as follows:

  • When a customer reports a potential erroneous switch (ET), the customer will receive a standard payment of £30 from each supplier if they are unable to agree within 20 working days whether an erroneous switch has occurred;
  • The customer will receive £30 from the contacted supplier if they fail to return the 20 Working Day Letter as required by the Erroneous Transfer Customer Charter within 20 working days;
  • An erroneously switched customer will receive £30 from their old supplier if they fail to re-register the customer within 21 working days; and
  • Where a switch has been completed, customers will receive a payment of £30 if suppliers fail to return a credit balance within 10 working days of issue of a final bill.

Phase 2 of the Guaranteed Standards will come into force during Summer 2019.

On the surface, this new legislation sounds like great news for suppliers and customers alike, however, let’s take a closer look…

Has OFGEM included a situation which could be abused by Customers? The first situation which qualifies for automatic payment is; ‘When a customer reports a potential erroneous switch, the customer will receive a standard payment of £30 from each supplier if they are unable to agree within 20 working days whether an erroneous switch has occurred…’

OFGEM issued a letter on 13th February 2019, ‘Supplier Guaranteed Standards of Performance for Switching – Final Decision and Statutory Instrument’, which in Annex A provides clarification of issues raised by consultation respondents.

The ET challenge Is OFGEM correct in assuming that customers will only notify their supplier when they suspect they are involved in an ET situation? Or will customers take advantage of this clause, in the hope of receiving £60?

Are all suppliers prepared to investigate and respond within 20 working days to large volumes of ET notifications?

Do suppliers have a burden of evidence robust enough and easily accessible to reach a timely conclusion and provide responses to their customers within the GSoP for Switching?

How will these new regulations impact delivery of an already delayed GB SMART Meter programme?

Only time will tell… Introduction of Guaranteed Standards of Performance for Switching (GSoP) could lead to artificially high volumes of ‘potential ET’ notifications; overstretched operational teams leading to rising levels of standard payments, and customers increasingly frustrated with deteriorating customer service performance.

Sadly, introduction of GSoP for Switching will most likely impact new entrants harder than the more established suppliers.

OFGEM will, no doubt, watch the market carefully to ensure these new requirements boosts confidence in the switching process and give customers peace of mind that they will be compensated, if something goes wrong.

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