Member Article

Ofgem propose small business protection measures

Ofgem is consulting on reforms that it says will make the energy market fairer for small businesses.

The regulator is proposing that bills and statements sent to small businesses show clearly when the contract ends.

Evidence that switching suppliers can be difficult has also prompted them to monitor the actions of all suppliers to ensure there is no unnecessary objection to switching.

An industry code of practice will also be introduced to tackle high pressure sales tactics and the provision of misleading information.

Ofgem are also looking to progress their case for acquiring powers from the Government to take enforcement action against brokers who mislead business customers.

Jonathan Elliott, CEO of price comparison service Makeitcheaper.com commented: “Ofgem’s backing of ‘Contract End Dates’ and notice periods on bills is a big win for small businesses. It makes the whole renewal process a lot more transparent and means far fewer will fall for the controversial ‘rollover trap’, in which businesses are unknowingly locked-in to paying high rates for at least a year.

“In a survey of 1,250 businesses we conducted earlier this year, 96% told us it would be easier to manage their energy accounts if contract end dates appeared on their bills. Knowing when your contract comes to an end - and therefore avoiding pricey rollover rates - basically means the difference between paying 15p and 10p a unit for electricity. For any business to take a third off its energy bill and put it straight back on the bottom line is a welcome shot in the arm.

“However Ofgem’s proposals won’t become compulsory until at least this time next year so we will continue with our campaign to get suppliers to commit to these changes voluntarily. Business customers of CNG and E.ON, for example, are already benefiting from seeing their contract end dates printed on their bills and we expect to see others suppliers following suit long before they are required to do so by law.”

This was posted in Bdaily's Members' News section by Tom Keighley .