The energy industry must do more to rebuild customer trust, Ofgem CEO Dermot Nolan has said.
Nolan warned that the findings of the Competition and Markets Authority’s energy market investigation showed that customers were justified in their low confidence in the industry. The actions of the suppliers were the problem, he said, as firms had overcharged customers by millions of pounds while some delivered “persistently poor customer service”.
However, Nolan was optimistic that competition was increasing, and that this would help address the issue. He particularly pointed to the fact that switching and the use of price comparisons websites were both on the up, remarking: “In proper competitive markets, companies who overcharge customers and give them shoddy service quickly lose market share to those who don’t.”
The regulator will also alter its own approach, moving away from the “unwieldy rulebook” of prescriptive regulation to a more flexible principles-based system. By giving companies more room to innovate, Nolan said, competition will be stimulated as suppliers seek new ways to draw customers away from companies that are complacent.