Trying to figure out the payout from an energy switch delay? Understanding the compensation for delay when trying to switch energy suppliers (and how those payments are divvied up between the old and new supplier and the energy network distributor) can seem, and is, complicated. Here’s what you need to know.
If you opt to change your energy provider to try and cut your costs and find a better deal, the process is usually pretty quick. Unfortunately, there can sometimes be hold-ups, and it’s not always clear what our rights are in these scenarios. As a consumer, you have a right to some important key compensations. Here’s what you’re entitled to if things go awry during the switch.
Compensation Norms for Spreading Switching Costs Out Over Time
As per the provisions of regulatory guidelines, your new energy supplier is required to arrange for the change of your premises from your old supplier to themselves, within five working days. If, for any reason, this doesn’t happen, your new supplier is bound to pay you £30—sort of like being fined. This £30 should be treated as an automatic credit to your energy account (you’ll pay £30 less for future energy use) or an appearance in your bank account (in the form of a check) within ten working days. Compare energy deals to ensure you choose the right provider.
Errors in Transfers and Associated Revised Compensations
Sometimes, an “erroneous transfer” might switch your service to a different supplier by mistake. If this happens to you, you could be entitled to a £30 payout—but only as long as you let the supplier know about the problem within 21 working days of it happening (and the old supplier is the one who gets the change back). This happens often enough that the Office of Gas and Electricity Markets has three levels of fine for suppliers who do it more than once a year. The first level is a £1,000; the second is £10,000; and the third is “unlimited”—which, as long as it’s inside the law, would likely be hundreds of thousands of pounds and be paid to the energy consumer who got switched in this way. It’s crucial to compare energy deals when switching to avoid such errors.
The Ofgem regulations make it clear—these quick solutions and pay-outs are designed for one thing above all else: keeping energy-consumer lives as undisrupted and unburdened as possible. And, of course, for keeping energy itself as a reliable and trustworthy service in the marketplace.
Extra Pay for Slow Resolutions
If the supplier doesn’t pay the demanded compensation in ten working days, they have to pay an extra £30 for their delay. The rule seems to be aimed at making sure the suppliers are prompt in fixing what they’ve done wrong—by assimilating the prompt payment practices from the 1980s with the promise of an extra fine for the suppliers who don’t pay promptly.
Further consideration can be given to £30 in additional compensation if, after finding out about the error, it took the supplier over 20 business days to respond. And if it turns out it wasn’t done correctly, you have to wait even longer—to the tune of more than 21 working days—for your old supplier to re-register your service. During these times, comparing energy deals might offer options for better service and compensation.
The strict regulations that are in place underscore how important it is for suppliers to keep tight reins on their business dealings and to act swiftly when called upon to serve customers. In energy, where trust is a part of the market and where customers often have no choice as to who their provider is, a system that can be hoodwinked aided slyly by interest charges added to customer bills is not a good look for a provider working in a system that this year will pay out more than $350 million in cold check penalties.
The limits placed on claiming compensation
It is important to understand that if your energy provider has stopped serving you, compensation may be hard to come by. The energy regulator’s safety net guarantees a supplier, but not a swift or accurate service.
FAQs
1. What should I do when the energy switch takes much more time than I thought it would?
If your switch isn’t finished within the established five business days, make sure to contact your new supplier and confirm the status. Should the days continue to pile up and escalate into something that hints toward your dissatisfaction, you might be entitled to a form of compensation.
2. Is it possible to change energy providers when you are a renter?
Of course, if you are a tenant paying your gas and electricity bills directly to the suppliers, you can still choose to change energy providers. But before you do, it is always a good idea to read your lease agreement and/or talk to your landlord to be sure you are within your rights.
3. How frequently can I change my electricity or natural gas provider?
You can swap energy suppliers as often as you like, and this can be very good for you if you are always trying to obtain the most favorable energy rates or are desperate to save cash at home. If you need to know more about your rights and the intricate ins and outs of the energy supply industry, you may want to consult the energy supply guide put out by Citizens Advice.
