Perspectives on the Supplier of Last Resort process

Last autumn (2019) Ombudsman Services hosted a workshop on the Supplier of Last Resort (SoLR) process. The session was geared towards energy suppliers that had gained customers from failed suppliers in the SoLR process.

The aim was to build a standard approach for dealing with failed supplier complaints and customer service issues, thereby ensuring gaining suppliers have the best possible foundation upon which to build new customer relationships.

Most of the invited suppliers were represented, with representatives from Ofgem and Citizens Advice also in attendance.

SoLR – a consumer experience and perspective

In a presentation to the workshop, Citizens Advice explained that the SoLR process created uncertainty for consumers, with many expressing fears about being forgotten.

Common questions from consumers centred around the status of credit, legitimacy of the actions taken by the gaining supplier and why their new tariff was different. In addition, consumers were unclear about what would happen to their in-flight complaint and what action to take with their own account.

In terms of debt and conduct of the administrator, Citizens Advice said many consumers felt they had been subjected to aggressive debt collection practices and errors regarding the amounts being chased. Overall there was concern over the lack of protection for consumers where debt balances were concerned, including those in vulnerable circumstances.

SoLR – a supplier experience and perspective

Ombudsman Services then talked through the pre-workshop supplier survey results. While suppliers described their overall experience of the SoLR process as negative, there was a mixed response to the impact on reputation and brand and whether they would consider entering the SoLR process again in future. The survey highlighted that more than two thirds of suppliers had encountered problems with customer data from administrators, affecting their ability to a) process accurate final bills and b) understand previous customer perceptions when starting the new relationship.

Suppliers were also asked about their experiences of working with Ombudsman Services during the SoLR process. Overall, suppliers reported a positive experience, but there was a mixed reaction to the suggestion that every SoLR should handle all ‘live’ ombudsman complaints that had been raised against the failed supplier prior to collapse.

At present, any in-flight complaints against the failed supplier can’t be accepted for investigation by Ombudsman Services and the consumer is encouraged to contact the gaining supplier if they have any ongoing issues affecting their account.

Our standard procedure for SoLR-related complaints is explained in more detail here.

Workshop themes and outcomes

In the afternoon, attendees split into groups to discuss how customer service and complaint handling processes could be improved within the SoLR process.

Below is a summary of the five main themes captured within the session and the possible actions that could be taken to improve the situation.

Regulation

• To ensure suppliers have the best possible chance of making a success of the SoLR process and thus ensuring positive outcome for consumers, there were calls to enable suppliers to be fully armed with all necessary customer account data. This, it was suggested, may need assistance from Ofgem as the regulator.

Measures

• A key point made by suppliers was regarding how different organisations, primarily the administrator and national gas and electricity databases, can have a significant impact on a supplier’s ability to deliver positive outcomes for consumers in a timely manner. It was stressed that the SoLR process is a unique situation and that standard industry timeframes were sometimes difficult to meet due to dependence on other parties. It was also recorded that, at present, responsibilities were not always clear.

Third-party obligations

• As described above, there are linked stakeholders that all play a role in setting the context behind the SoLR process, either directly or indirectly. It was felt that all should be aligned to enable a smooth process, with successes championed publicly.

Communication

• At the heart of providing consumers with the best possible experience is effective and consistent communication. It was felt that by combining efforts to agree standardised communications and timescales, uncertainty could be avoided for all parties.

Data

• It was agreed that access to accurate data is essential for the gaining supplier as it seeks to build a positive relationship with new customers following a transfer from the failed supplier.

Next steps

It was agreed that a new SoLR working group would be set up to work towards the following aims and objectives:

• Agree a framework from which to build a minimum dataset that allows suppliers to be well informed prior to entering the SoLR bidding process.
• Define key terms within the SoLR process to remove any ambiguity between stakeholders.
• Define all parties in a SoLR and what they are responsible for.
• Explore the possibility of compulsory ownership of the final billing process by the SoLR.
• Agree standard guideline/timescales for consumer outcomes in the SoLR process.
• Create an 'industry' process for SoLR that breaks down into all major constituent parts.
• Create a process to register/dispute open and close meter readings (especially when an administrator is involved).
• Create consistent communication from all parties involved within the process.
• Create a 'what to do when your supplier goes into administration' guide for consumers to help address uncertainty.

Get involved

Ombudsman Services will be in touch with workshop attendees to progress this work further. If you would like to register you interest in joining the working group, please email partners@Ombudsman-Services.org by 5pm on Friday 31 January 2020 at the latest.