OVO compensates customers for failing to resolve customer complaints referred to Citizens Advice Extra Help Unit and Energy Ombudsman
Decision
- Publication date
- Industry sector
- Supply and Retail Market
OVO has acknowledged that its ability to serve customers in line with certain licence and regulatory obligations when dealing with consumer complaints was compromised.
OVO will pay compensation of £378,512 to customers and an additional £2 million to the Energy Industry Voluntary Redress Scheme1 (EIVRS) in recognition of the severity of consumer detriment caused by this situation and as a deterrent measure for the management of future customers.
In July 2023 Ofgem opened compliance engagement with OVO Energy’s licensed supply companies2 (OVO) due to serious concerns regarding the resolution of Citizens Advice Extra Help Unit3 (EHU) consumer complaints and the implementation of Energy Ombudsman4 (EO) remedies.
The EHU, which assists vulnerable customers, reported that OVO accounted for a significant volume of its open casework and was an outlier for cases left open for too long without resolution. Despite the EHU engaging with OVO regarding its complaint performance, OVO struggled to effectively organise and manage the complaints.
The EO was concerned that OVO had problems implementing EO remedies in respect of complaints referred to it and, despite engagement by the EO, this situation became progressively worse over time.
We expect all suppliers to treat customers fairly and work swiftly to resolve issues once they are raised. When customers have a problem, it is important that suppliers take steps to put things right. We expect that all customer complaints are received, handled, and processed in a timely and efficient manner in accordance with the relevant regulations and OVO's standard licence conditions (SLC).
Ofgem takes customer service and complaints resolution very seriously and we were concerned by the lack of timely progress made by OVO towards resolving these issues.
Ofgem engaged closely with OVO to understand the extent and the root cause of the issues. OVO identified the broad root causes as limitations in operational controls, data visibility, staff tenure and manual complaint handling. We required OVO to provide a remediation plan to stem the flow of complaints, address and resolve complaints efficiently and prevent them from becoming aged and to prioritise addressing the outstanding complaints referred to OVO by the EHU and the overdue EO remedies.
Following our engagement, OVO reviewed its systems and processes and identified and addressed the deficiencies that led to the issues, including appointing sufficient senior oversight staff and implementing reporting procedures.
OVO identified 1,395 customers, including 706 vulnerable customers, whose complaints has not been dealt with in a timely manner or whose complaints’ resolutions, as mandated by the EO, had not been implemented. OVO is in the process of paying compensation, amounting to £378,512 directly to the affected customers and, on 6 September 2024, paid £2 million to the Energy Industry Voluntary Redress Scheme in recognition of the severity of the customer detriment caused by this issue and to reflect a deterrent measure for the management of future customers.
Key lessons learned
It is important that customer complaints are taken seriously and addressed in line with suppliers’ licence and regulatory obligations.
Suppliers must ensure that they have sufficient systems and resources to deal with complaints, and:
- make it easy for a domestic customer to contact the licensee
- act promptly and courteously to put things right when the licensee or any representative makes a mistake
- otherwise ensure that customer service arrangements and processes are complete, thorough, fit for purpose and transparent
In relation to domestic customers in vulnerable situations, licensees must:
- seek to identify each domestic customer in a vulnerable situation, in a manner which is effective and appropriate, having regard to the interests of the domestic customer
- when applying the Standards of Conduct, do so in a manner which takes into account domestic customers identified as being in a vulnerable situation
Suppliers must ensure that they have and maintain robust internal capability, systems and processes to enable them to:
- efficiently and effectively serve each of its customers
- efficiently and effectively identify likely risks of consumer harm and to mitigate any such risks
- comply with relevant legislative and regulatory obligations
In determining the appropriate action against supplier non-compliance, we take into account whether suppliers self-report, the extent of their engagement with us through the compliance process and their past performance and behaviours.
[1] OVO Electricity Ltd (06858121); OVO Gas Ltd (06752915); OVO (S) Gas Ltd (02716495)
[2] A service managed by Citizens Advice Scotland, advocating on behalf of vulnerable energy consumers across Great Britain
[3] The Energy Ombudsman provides independent dispute resolution services
[4] SLC 0 and SLC 4A of the gas and electricity supply licences and Regulation 7(1)(a) and (b) of the Gas and Electricity (Consumer Complaints Handling Standards) Regulations 2008