New standards of conduct which force the UK’s energy suppliers to treat small businesses more fairly are now in place.
The introduction of the new Enforceable Standards of Conduct is the first stage of Ofgem’s reforms to make the energy market “simpler, clearer and fairer”.
They form part of the wider Retail Market Review, which was revealed earlier this summer.
Backed by Ofgem’s powers to levy fines, the standards cover all communication between suppliers and business customers, when billing, contracting and switching.
They decree that suppliers treat small businesses in an “honest” way, free of any form of deceit.
Transparency requirements demand that information about a product (including the terms and conditions) is expressed fully, and in a manner “which is clear and easy to understand and which avoids concealed pitfalls or traps”.
As part of this suppliers are also required to scrap industry jargon and use “plain and intelligible” language.
They must also act in a “professional manner”. Their behaviour should not put the industry in disrepute, and “aggressive, intimidating, rude or condescending behaviour would be examples of acting contrary to this requirement,” the standards say.
They also require suppliers to act quickly to make amends when they have made a mistake, for example wrongly preventing a business from switching.
The new standards apply to business customers who typically spend up to £10,000 a year on each fuel – Ofgem’s recently revised definition of microbusinesses.
The standards would provide “more protection in the energy market” and give businesses “the confidence to shop around and find the best deal,” Ofgem chief executive Andrew Wright said.
“Small businesses make a major contribution to the British economy and it’s very important that they have confidence in the energy market. Two thirds of all the concerns businesses have about the market relate to billing, contracting and switching supplier, which is why our standards of conduct target these three areas,” he said.
As part of the wider Retail Market Review small businesses will also benefit from the limit on the automatic rollover of contracts to one year.
From March 2014 suppliers will also be required to put the contract end date on all bills for businesses which typically spend up to £10,000 per fuel, per year.
This will ensure these businesses know exactly when they should start comparing other offers in the market so that if they want to switch they could be ready to do so when their contract ends.
In addition Ofgem is currently reviewing whether automatic rollover of contracts for small and medium sized businesses should be banned altogether.
Ofgem expects to consult on its preferred option before the end of this year, and reach a conclusion by the end of winter 2013/2014.