Investigation into Maxen Power Supply Ltd and its compliance with its obligations under SLCs 0A, 4A, 7A, 7.3, 14 of the Electricity and Gas Supply Licences

Investigation
  • Open
  • Decision proposed
  • Closed
Publication date
Company
Maxen Power Supply Limited
Industry sector
Supply and Retail Market
Licence type
Electricity Supply Licence
Gas Supplier Licence

On 29 November 2023, Ofgem opened an investigation into whether Maxen Power was in compliance with Standard Licence Conditions ("SLC") SLC0A, 4A, 7A, 7.3, 14 and 14A of the Gas and Electricity Supply Licenses.

These SLCs relate to treating microbusinesses fairly, operational capability, deemed contract terms, terms of contracts, supply to microbusiness customers and customer transfer and transfer blocking.

The below sets out the findings of Ofgem’s investigation, actions taken by Maxen Power to resolve the issues and our reasons for closing the investigation through the agreement of alternative action.

Background

Maxen Power is a UK based non-domestic energy supplier based in east London.

Ofgem’s investigation into Maxen Power focussed on the following:

  • customer service procedures, including complaints handling and Change of Tenancy (“CoT”)
  • operational capability and the requirement to have robust systems in place to mitigate risk of consumer harm
  • accuracy of contractual terms, both verbal and written
  • deemed Rate pricing, policy and methodology
  • customer transfer procedures

On 10 May 2024, the Gas and Electricity Market Authority (“the Authority”) issued Maxen Power with a Provisional Order (“PO”) as it appeared that Maxen Power was contravening, or likely to contravene, SLCs 0A and 4A. 

This action was taken due to serious concerns over Maxen Power’s CoT policy and the monitoring of Third-Party Intermediaries under contract who provided customer referrals (“TPIs”) to Maxen Power.

Maxen Power complied fully with the requirements of the PO. As such, the PO was revoked on 7 August 2024.

Investigation Outcome

The investigation concluded that Maxen Power acted in contravention of SLCs 0A, 4A, and 7.3 with respect to Maxen Power’s:

  • complaint handling procedures and capabilities
  • CoT procedures
  • contractual terms regarding disconnection and reconnection charges
  • monitoring of TPI behaviour; and
  • Deemed Rate policy

Additionally, Maxen Power contravened SLC 5A for failing to report timeously previous TPI infractions.

There was insufficient evidence to indicate breaches of SLCs 7A, 14 and 14A.

Ofgem takes the fair treatment of customers very seriously. During this investigation, it became apparent that Maxen Power had significant gaps in their customer service procedures which exposed customers to an increased risk of harm.

Maxen Power engaged meaningfully with Ofgem and have identified and/or rectified process gaps during the investigation.

Maxen Power has engaged constructively with the case team during the investigation and will continue to engage with Ofgem in this regard following closure of the investigation and as a result:

  • Maxen Power has accepted the findings of the investigation
  • Maxen Power has submitted a payment to Ofgem’s Energy Industry Voluntary Redress Fund in the amount of £1,650,000
  • Maxen Power has agreed to update their Deemed Rates policy and amend contractual terms around disconnection and reconnection charges
  • Ofgem will monitor the implementation of any new policies and procedures introduced by Maxen Power as a result of the investigation and PO