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Automatic compensation for switching problems

Under a new proposal announced by Ofgem in June, suppliers will be required to automatically compensate customers if their switch goes wrong – we think this is great news and are really pleased at the steps Ofgem are taking to protect consumers.

The proposal for automatic compensation should be in place January next year and we hope these new protections give customers the confidence to shop around, find the best energy deals and switch suppliers. Although switching problems are rare, the new proposal should serve as an incentive for suppliers to reduce the number of problems and boost consumers’ confidence in switching.

Recent research by Ofgem has found that many people do not switch energy because of worries that something may go wrong. This is especially relevant if they have had a previous bad experience. The new rules would give consumers peace of mind that they will be compensated if something goes wrong when they switch – it’s also important to note that a gas and electric supply will never be cut-off during a switch.

In 2017, 5.1 million electricity consumers and 4.1 million gas consumers in total switched supplier. This is the highest number for almost a decade.

Under the new proposals:

  • Customers will receive automatic compensation if a switch goes wrong
  • Suppliers will be required to pay at least £30 in compensation for each switching problem
  • Compensation will cover erroneous transfers and delayed switches that take longer than 21 days to complete as well as late final bills and credit balance refunds

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 prevent customers from finding the cheapest gas and electricity deals.

“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.”

Ofgem has gone further and gave the green light to an initiative to overhaul industry systems by 2020 to allow people to switch by the next working day – a bold proposal which should reduce the switch timeline by 20 days.

How to switch supplier
We’re not just saying this – the easiest and best way to switch to the cheapest gas and electricity deals is to use an automated switching service like Switchd. We compare your current tariff daily against 1000’s of other UK tariffs and once you’re signed-up, you’ll know within a few minutes if you’re over-paying for your energy.

Some customers worry that using automated switching may result in their gas and electricity being moved to a supplier they may not like or with whom they’ve had a pervious bad experience. Our personalised dashboard allows you to exclude certain suppliers from your search, select a minimum savings amount or choose only green tariffs. What’s more, we only use a list of carefully vetted suppliers who are evaluated by their own customers and whose service and switching timescales are constantly monitored.

There’s no need to fill out any paperwork or sign a new contract – we do all the hard work for you and if we can’t save you at least £50 a year on your current bills then it’s free. You can’t lose.