Energy firm complaints hit record high

http://www.theguardian.com/business/2014/jul/14/energy-company-complaints-record-ombudsman

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The number of customers complaining to the independent ombudsman about their energy bills has soared with more people making official complaints in the first six months of this year than the whole of last year put together.

Official complaints more than doubled to 22,671 in the first six months of 2014 from 10,598 in the previous six months. The 2013 total was 17,960.

Complaints to the ombudsman – who deals with disputes unresolved after at least eight weeks – also reached a record for one month at 4,124 in June, an increase of 216% on a year ago.

Chief energy ombudsman Lewis Shand Smith said: "The spike in complaints is in part a result of the rising cost of living, but also as a result of consumers becoming more aware of their rights and feeling more empowered to act and fight for a fair deal. Addressing these concerns is crucial to restoring consumer confidence in the sector." Billing-related issues accounted for 84% (19,009) of complaints between January and June 2014. Transfer issues, over switching to a new energy provider, were the second largest cause for complaints at 13% (2,988).

A spokesman for Energy UK, the industry trade body, said:"The energy industry works hard to provide the best service for its customers but in an industry serving 27 million households sometimes things go wrong. However no one wants to see complaints rise and each complaint is taken very seriously with companies working hard and investing in resources and new systems to resolve issues as quickly as possible. Most complaints are dealt with by the end of the next working day with no more than a phone call." Energy UK added that it launch a consultation this summer about dealing with complaints it cannot fix in 48 hours.

Energy watchdog Ofgem last month warned npower to resolve its billing problems by the end of August or halt all telephone sales to new customers, in the latest regulatory skirmish to hit the energy sector. The big six energy firms – Centrica, EDF Energy, RWE npower, SSE, E.ON and Scottish Power – have been warned by Labour leader Ed Miliband that they will be hit with a price freeze if his party wins the general election Last month the energy watchdog, Ofgem, referred the power industry to a formal investigation by the Competition and Markets Authority.

The 18-month investigation will look at whether the big have been profiteering and whether they should be broken up by separating their power generating businesses from the units that sell energy to households. Announcing the referral, the chief executive of Ofgem, Dermot Nolan, said: "Now is the right time to refer the energy market to the CMA for the benefit of consumers. This will help rebuild consumer trust and confidence in the energy market as well as provide the certainty investors have called for."

The CMA will also look at "tacit" co-ordination between firms over the timing of price rise anouncements, as well as new evidence that points to prices rising faster when industry costs increase - but declining more slowly when costs fall

The ombudsman figures come a week after Citizens Advice and Citizens Advice Scotland said complaints about npower and Scottish Power doubled in the first three months of 2014. Complaints about npower rose from 306.8 for every 100,000 customers to 592, in the last quarter of 2013. The remaining members of the big six also fared badly. Complaints about Scottish Power rose from 100.5 per 100,000 customers to 197.7, followed by SSE (34.1), British Gas (75.4), E.ON (83.6) and EDF Energy (84.5).