Energy supplier banned from taking on new customers

The troubled supplier is not allowed to take on new customers.
The troubled supplier is not allowed to take on new customers.
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Economy Energy faces the possibility of having its licence revoked after it was banned by Ofgem from taking on new customers amid concerns over customer service.

Economy Energy faces the possibility of having its licence revoked after it was banned by Ofgem from taking on new customers amid concerns over customer service.

The ban will remain in place for up to three months for Economy Energy to “take steps to improve and expand” its customer contact procedures via email and webchat, address billing and payment failures, and issue customer refunds in a timely manner.

The regulator said the small energy supplier had also been ordered to stop requesting one-off payments and increasing direct debits.

If it fails to make improvements, Ofgem can confirm the provisional order to extend the ban or, if the supplier fails to improve, it can take steps to revoke its licence.

Ofgem has taken action due to the decline in the standards of Economy Energy’s customer service, complaints handling processes, and billing and payment procedures.

The Coventry-based supplier, which has around 244,000 customers, is also thought to be in financial distress and assessing options with KPMG.

Several small providers have gone bust recently, including Spark Energy, Extra Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U, One Select and Usio Energy.

Anthony Pygram, director of conduct and enforcement, said: “Ofgem is taking action to protect customers from suffering more harm from the unacceptable level of customer service provided by Economy Energy. We expect the supplier to take immediate action to rectify its failings or face having its ban extended.

“All suppliers are required to treat their customers fairly. Where they do not, Ofgem will take the necessary steps to ensure suppliers change their behaviour and to prevent further harm to customers.”

Alex Neill, Which? managing director of home products and services, said: “Economy Energy rated poorly in our most recent annual customer survey. Energy customers shouldn’t have to suffer shoddy service, billing and payment problems, or poor complaints handling, so it’s right the regulator is stepping in.”

Peter Earl, head of energy at UK price comparison website comparethemarket.com, said: “Energy companies should not be allowed to take on new customers if they are transparently not serving their existing customers well enough.”