By Nicholas Earl
TruEnergy has been slapped with a provisional order, compelling the supplier to take action so that its direct debit policy is fit for purpose, and that customer direct debits are set at the right level.
It is now required to commission an independent audit to assess whether its direct debit processes are compliant with its regulatory requirements.
The energy firm also has to review the direct debit level of all customers who use this payment method, and make any adjustments as appropriate.
This follows an Ofgem review into the way all suppliers set their direct debits, which highlighted ‘severe’ concerns with the energy firm.
Ofgem’s deputy director Charles Hargreaves said: “We know how hard it is for energy customers right now so it’s crucial that the amount they pay each month by direct debit, or otherwise, is right so they can manage their money. We need suppliers to step up and support their customers, especially during these very difficult times, and as regulator, we’ll be making sure they do so.”
TruEnergy is a domestic and non-domestic supplier, serving approximately 7,500 customers across the UK.
If it fails to comply with the provisional order, this could result in further enforcement action being taken by Ofgem.
The next market compliance review into suppliers will focus on customer service, and is expected to be published later this year.
The watchdog’s efforts to reform the energy sector come at a challenging time for consumers, with household energy bills expected to spike from already record levels to £3,500 per year this October.
There are also forecasts of £500 per month energy bills this January.
Watchdog’s review into direct debits riles challenger suppliers
Ofgem’s recent review into direct debits was criticised by several energy firms dumped in the lowest category, with “moderate or severe” issues with how they handled credit balances.
Good Energy boss Nigel Pocklington accused Ofgem of “regulation by press release” which he argued “was not very becoming of an industry body.”
The renewables only supplier was placed in the bottom group alongside Utilita Energy, Ecotricity Green Energy, Tru Energy and the now defunct UK Energy Incubator Hub.
Pocklington revealed Good Energy had “moderate” issues with documentation concerning direct debits – which have now been resolved.
He told City A.M.: “We’ve fixed that within two weeks, but we have not had acknowledgement yet. We reacted with urgency to our case, but Ofgem didn’t. So, I didn’t think the criticisms were fair. I thought it was an act of trying to find something to say.”
Meanwhile, Utilita boss Bill Bullen – another firm with “moderate” issues – revealed he has lost confidence in Ofgem following the direct debits review.
Speaking to City A.M. earlier this month, he said he could no longer trust them to navigate the industry through the ensuing crisis, slamming Ofgem’s treatment of his firm as “outrageous.”
Ofgem has been approached for comment.
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