Complaints to Ombudsman Services: Energy – research report
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This is a research report for Ofgem by GfK NOP exploring why few consumers refer their complaint to the Ombudsman Services: Energy
Ombudsman research
It is important that consumers have access to an independent means of redress if their energy complaint cannot be resolved. Ombudsman Services: Energy is there to provide this final means of resolution. However, our analysis shows that few customers who can go to the Ombudsman actually do so. We therefore conducted research to find out why.
Background
Domestic and micro business customers can ask the Ombudsman to investigate their complaint if the energy company cannot resolve it to their satisfaction after eight weeks or says it can do no more to resolve it (known as deadlock), whichever is sooner. The energy company has to write to the customer at this point to tell them about the Ombudsman: that it’s independent; free; the types of redress it can provide; and that its decisions are binding on the company not the customer. Our analysis showed that few customers who had been sent a letter then sought the Ombudsman’s assistance. Therefore, we commissioned research to understand what barriers prevent them from doing so, and what we can do to remove those barriers.
Research findings
Supplier communications
The research suggests consumers disengage from suppliers’ letters, and some do not recall getting a letter. They are uncertain about what is happening, what their supplier is doing to resolve the complaint or how long it will take. Some customers were surprised to get the eight week letter as they thought the supplier was investigating. There were also concerns about the tone, layout, language, and lack of personalisation of letters.
Awareness and perception of the Ombudsman
The research found that consumers were unclear about who the Ombudsman is, its role or the types of complaint it handles and questioned its independence. They think it’s too high level to consider their complaint, that the process will be a complicated one.
Loss of momentum
The research suggests that consumers become worn out by the whole complaints process and disengage from it. Other priorities take over and the customer takes no further action in respect of the complaint.
Research – next steps
We held a roundtable with large and small suppliers, the Ombudsman, and consumer groups to discuss the findings and consider what steps we might take to increase the number of consumers going to the Ombudsman.
As a result, we have asked Energy UK to chair a working group to redesign supplier letters, agree the key messages customers need to take from them, and how these messages can be best conveyed. We expect the working group to deliver results by early February which all suppliers should then adopt. Some suppliers have also agreed to pilot different approaches to encourage customers to engage in the process including: one supplier will shorten the period for referral to the Ombudsman from eight to six weeks; another will send a letter after six weeks to give an update on their complaint and to trail the eight week letter; and one supplier will brand their deadlock letters jointly with the Ombudsman.
We will analyse the results of these measures in late 2014 to evaluate what further steps may be necessary.