Response to Ofgem’s consultation on domestic supplier-customer communications rulebook reforms
We acknowledge that the prescriptive requirements brought in as part of the Retail Market Review are no longer fit for purpose, in an expanding market with increasing product complexity and changing consumer preferences. We do have some concerns with the proposals, and areas where we think Ofgem should make changes ahead of its decision later this year:
We are broadly supportive of the changes proposed by Ofgem. These should deliver improved communications that are designed around consumer needs and preferences. We would expect the changes to particularly lead to an improvement in communications to those who are poorest served currently - prepayment customers and those with legacy time-of-use tariffs.
We don’t think the Advice and Assist principle goes far enough to make suppliers tailor information to consumer characteristics, or provide this in a timely way. This means good outcomes could be over-reliant on consumers recognising when they need assistance, and pro-actively using information from suppliers to access support. Instead, suppliers should also be required to identify when consumers might be more likely to need help, and take steps to provide timely and relevant information on support.
Rules on the timing and form of contract change notifications could be strengthened to ensure these are sent at the time, and in a form, that is most effective to prompt the consumer to consider their options.
In order to deliver these changes successfully Ofgem needs an appropriate compliance approach in place. We have some concerns that this has not been as successful as it could have been in earlier phases of the Future Retail Regulation programme. We also think that some suppliers may not be equipped to deliver the range of communications that are suitable for vulnerable consumers. To help overcome this, Ofgem should clearly set out to suppliers the expected consumer outcomes of their changes for suppliers in simple terms. It must also put in determine what data could be used to identify issues with supplier communications, and what other steps can be taken to monitor the impact of the changes.
Those with the greatest responsibility for delivering consumer benefits from these changes are energy suppliers. We are aware that some suppliers have asked for specific backstop standards from Ofgem, or guarantees against enforcement action if they make changes. This does not reflect the grown-up approach that is required by the new rules, and such requests should be resisted by Ofgem. Greater freedoms for suppliers in how they communicate with customers mean they must also do more to understand, and meet, customer needs and preferences.