The standards of conduct in the electricity and gas supply licences set out that suppliers must ensure that “each Domestic Customer, including each Domestic Customer in a Vulnerable Situation, is treated Fairly”. This licence condition is principles-based and so exactly how each supplier interprets it is up to them. Although, if Ofgem is not satisfied that vulnerable customers are being treated fairly then it can and will take enforcement action.
The COVID-19 pandemic has required suppliers to be even more aware of vulnerable customers and many have put in place provisions to protect customers, particularly those with Prepayment Meters (PPMs). Some examples of initiatives suppliers are taking include sending pre-loaded PPM top-up cards to customers’ homes, stopping undertaking door-to-door sales or meter readings and on 6 April OVO Energy announced a £50mn Hardship Scheme to support its customers which are experiencing extreme financial difficulties as a result of COVID-19. In addition to this, disconnection of domestic customer credit meters has been completely suspended by the government during the COVID-19 pandemic.
It is no secret that the identification of vulnerable customers is not easy, as vulnerability can be transient, invisible and even using the term vulnerable can be discouraging to some consumers. Ofgem itself has acknowledged these difficulties, most recently in its proposals to improve outcomes for consumers who experience self-disconnection and self-rationing, but in this time where COVID-19 may cause financial, mental and physical vulnerabilities to arise, this identification process may become even harder.
While identification of vulnerable customers is difficult, many of the schemes that exist for the vulnerable require the customer to take initiative. There are requirements on suppliers to offer to add the customer’s minimum details to the Priority Services Register (PSR), but government schemes such as the Warm Home Discount (WHD) rely on customers being aware of their eligibility and then applying for the scheme themselves. In addition to this, the thresholds associated with the WHD mean that even customers who would be eligible due to their personal circumstances, may not be able to access this benefit if their supplier is not required to offer it.
In the coming weeks and months, it will be essential that suppliers are aware of their vulnerable customers. Every supplier will be forced to be innovative, come up with new initiatives and find new ways to identify and support vulnerable customers. It may be that some suppliers decide to treat all customers as vulnerable, and there are greater calls for data and knowledge sharing in the industry. There are already ongoing cross-sector initiatives, that look at sharing data between the energy and water sectors.
After all, vulnerability isn’t, and should never be, competitive. Suppliers should not use their services to the vulnerable as a marketing tool. Supporting vulnerable customers should be something that suppliers can work together on, and share best practice on. At a time when the regulator and government will also be aware of the challenges facing suppliers and vulnerable customers, there could be some important lessons learnt to set foundations for future support of vulnerable customers. These unprecedented times could reveal gaps in the support, or lead to better support in the future for those in need.
Vulnerability viewpoint forum
Cornwall Insight’s Vulnerability Viewpoint is a quarterly forum designed for energy suppliers to share best practice and discuss recent developments in the vulnerability sphere. In light of a changing regulatory framework, the forum looks to facilitate the sharing and development of best practice for vulnerable customers and examine how to deliver the emerging new vulnerability agenda across the sector. Meetings will include visitors from service providers to discuss what the party offers in terms of services for the energy market and understand how they can support suppliers and vice versa.
All our forums have now moved online! We are now offering free trials to all our forums and our next Vulnerability Viewpoint is running 11am – 3pm on Thursday 16 April. If you are interested in attending Vulnerability Viewpoint or would like more information please get in touch with Tom Faulkner on 01603 542123 or by emailing t.faulkner@cornwall-insight.com.
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