The Energy Ombudsman - Good or Bad ?

Terrylw1

25.6_Pre-contract_oblig wrote: »

2. If npower are in breach of the SLCs stop them from using their 'new system'.
3. If they have already given npower permission to continue 'breaching SLCs' they should at least publicly state the grounds. I fail to understand how Suppliers can legally breach SLCs without Ofgem giving them explicit permission.

Just to address a couple of these.

1. Their new system has cost them a few hundred million and they are over a year behind schedule I believe so I'll bet their costs are soaring from all the extra time with consultants, seconded posts, builds & testing.

Some of the SAP suite that suppliers are purchasing is 'off the shelf' based on Indian & Australian markets so they have to live with whatever is there. Suppliers then build bespoke SAP systems around some of this.

So, I think every supplier moving into SAP is hitting the same problems and its a test of how good they are in beating these issues. Sadly, Ofgem who say they are keeping an eye, clearly aren't.

2. They have got some exclusions in the SLC's but beyond that its purely for Ofgem to award any other type of exemption.

The same occurs in the Master Registration Agreement (MRA) managed by MRASCO and the Balancing & Settlement Code (BSC) managed by Elexon.

Elexon are very active in searching for breaches and conduct audits on a regular basis as well as having an ongoing issue agenda. So, they are very involved with suppliers since the BSC is the financial side flowing through operational processes.

If you want a good example of a systemic breach, not considering Backfoot's which are often individual to a supplier, look at the switch objection one, SLC14. This one is openly breached and one supplier rep on here even posted that they believe they can vary it!

I'm also convinced that SLC14A for 21 day switch dates, is a failure based on frequent threads and this one passes via an electronic method so its very easy to audit.

Ofgem included a SLC to request information but its rarely used and generally I think it will be triggered by outside influences and not from their expecting work in governance.

25.6_Pre-contract_oblig

Hi Terry,

Thanks very much for two more informative posts! (#31 and #32)

25.6_Pre-contract_oblig

undaunted

backfoot wrote: »

What are your experiences or impressions of the Energy Ombudsman ?

I am part way through using their service for the first time and prior to adjudication, I thought I would document my experience and find out about the experiences of others.

GOOD

The ability to refer an unresolved dispute to a third party.

The ability for them to award compensation and make recommendations for future improvement.

BAD

Why doesn't it all come under the Regulator Ofgem ? To the layman and even experienced Energy customers,the boundaries between Ofgem,the EO and Consumer Focus are confusing and blurred.

It takes too long. Six months after a simple information request to EDF, the case is still outstanding. There have been no delays on my behalf. The issue is now time elapsed and only the complaint is still valid.

The EO redrafted my complaint and in doing so omitted the key element questioning the Supplier's compliance with an Ofgem Guidance leaflet and the Standard License Conditions. How dare they alter a customer's complaint ? This was eventually reinstated but has caused a loss of confidence in the process.

Why don't you get one assigned Complaint Handler? Each letter,each phone call is dealt with by a different person. It is just like dealing with a supplier, where continuity seems impossible.

Why aren't you kept informed? I chased after seven weeks to be told the 6 to 8 week deadline would be exceeded because EDF had refused mediation. So how long will it be ? It is with a report writer so they couldn't tell me. They agreed for the report writer to ring me back with the latest timeline ....they didn't.:(

Will I see this report? Am I entitled to see it? How do I know the complaint has been properly investigated? Have they consullted OFGEM? What is the skill base of the complaint handler regarding License issues?

I am still hopeful of the process and a favourable outcome because the obligations are set out in black and white. That the associated Customer Service was obstructive and unhelpful is obvious. I am just nervous that it feels like a remote outsourced body is going through the motions rather than a interested and dligent Regulator enforcing their own rules.

What are your experiences/impressions?

I believe them slow, ineffective and have also known them to misinterpret a complaint. I share your apparent view that Ofgem should be dealing with customers (as well as suppliers) rather than the current system of 3 bodies producing slow and poor results.

backfoot

I have now received the final report. It is the most inept process I have encountered in all my my years of experience in the Energy Sector.

A customer has no redress via the SLC's to a complaint. The EO does not abide by its own Terms Of Reference. It reaches conclusions contrary to the words written within Regulations or Ofgem Guidance Documents.There are inconsistencies throughout the document.

I welcome views :

YOUR COMPLAINT ABOUT EDF ENERGY
You requested a review of the report issued following the investigation of your complaint. EDF Energy accepted the report.

I am sorry not to let you have my decision sooner.
You have raised some concerns about the investigation process. You say that the investigation officer did not make contact with you to understand the issues. We ask both parties to submit their evidence in writing and the investigation officer will then review this information. If there is a point that requires clarification, the investigation officer may contact you. However, it is the responsibility of both parties to make their representations clear when submitting their case. I understand you have now discussed your complaint with the investigation officer and notes on the case reflect the content.

You comment that the investigation officer has made a judgment on the interpretation of the Standard Licensing Conditions (SLCs) that she is not qualified to make without reference to Ofgem. You say that the interpretation that she has made is extremely narrow.

As the investigation officer explained in her report, we do not determine whether there has been a breach of the SLCs. It is our role to investigate individual disputes and make recommendations for action a company should take to resolve disputes. While being mindful of the regulations within the industry it is not our role to investigate whether a company is breaching its licence. That is Ofgem’s role. I cannot require a company to change the way it presents its bills or calculates a direct debit payment providing it is complying with the conditions set out in its licence. If we observe systematic failures, which have a detrimental effect on customers we can and will refer this to the regulator. On an individual level, I will consider the shortfall and any inconvenience experienced by the customer and require a goodwill payment if appropriate. The award will not be a reflection of any possible widespread breach by the company as my remit is to consider the effect on the individual customer only.

The investigation officer considered that the SLCs do not set out that each company should provide actual calculations showing why it has changed a Direct Debit payment but that the company should explain why there has been a variation. Therefore, she considered that EDF Energy acted reasonably by providing explanations about what it had based its calculations on.

I appreciate your concern that EDF Energy has not provided the actual calculations. However, there is no evidence in this case that the calculation is incorrect and that this has had a detrimental affect on the customer. Therefore, I consider that EDF Energy has provided appropriate information in its responses.

I appreciate that EDF Energy advised it would provide the calculations and it has not done so in a timely manner. However, as the investigation officer explained in her report, EDF Energy’s systems automatically calculate the direct debit payments and the calculations would not be readily available to the advisors at EDF Energy.

This is why EDF Energy advised it couldprovide you with the calculations but it could not advise you how long it would take. EDF Energy advised that it could provide this information and it is reasonable to expect it to meet this promise. The investigation officer explained this in her report.

I note your comments that the investigation officer did not refer to Ofgem’s customer leaflet on direct debits. I apologise that the investigation officer did not refer to this in her report.
However, this leaflet sets out a summary of the SLCs in relation to direct debits and nothing in that leaflet demonstrates that EDF Energy has failed to comply with regulations.

You say that the investigation officer has not made a definitive decision about what you consider is a bogus defence from EDF Energy. I apologise that the investigation officer did not state whether she considered this was a valid defence. EDF Energy set out what it believes its requirements are in relation to providing to its customers actual calculations and I consider this reasonable. I have not concluded that EDF Energy used another SLC incorrectly as a defence against your complaint.

You say that the goodwill award of £20 does not reflect the issues that we have found against EDF Energy. Furthermore, you say that this complaint has taken considerable time and effort on your part and that you find the £20 award derisory. I do not award compensation for time spent dealing with a complaint. Any goodwill payment awarded is an acknowledgement of the shortfalls in customer service only. You have experienced delays in responses to your complaint but I am of the view that the goodwill award is reasonable to acknowledge the shortfalls in customer service.

You say that EDF Energy’s claim that it has already provided the goodwill payment is false, as it has paid goodwill on two occasions for unrelated matters. You say the first was in relation to EDF Energy not setting up the gas direct debit and the second was for a time when EDF Energy incorrectly took a direct debit from the account, which represented the balance on the account.

I have clarified this with EDF Energy and it confirms that it applied £20 goodwill payments to your account on 3 November 2011 and 9 December and these were in relation to separate complaints. It has not applied a further goodwill payment in respect of this issue. Therefore, it should now provide a £20 goodwill payment for this complaint. I will amend the remedy to reflect this.

After reviewing the complaint, I have decided that the further information submitted does warrant a change to the recommendations. The final decision requires EDF Energy to:

·

provide details of the direct debit reassessment that took place on 6 February 2012;

·

send a letter of apology; and

·

provide a goodwill payment of £20.

I shall write to EDF Energy to inform it of the final decision.

There is no appeal against the final decision and this letter now ends the process of investigating your complaint.

If you do not accept the final decision, or fail to respond, it will not be binding

Terrylw1

OK, so how does the OE think you can explain why there has been a variation without being able to understand and explain the calculation behind it?

So, I guess this OE would accept being told "Its gone up because we think you will use more".

This OE doesn't believe there was a bogus defence in misusing the SLC that states they don't have to give a forecast until you have been with them for 12 months when you were under 12 months and we have SLC27.14 & 27.15 to cover the consumer before SLC31A kicks in? That's just ridiculous and a complete misinterpretation of the SLC's. Clearly this OE doesn't understand the SLC's or has an agenda not to address your issue.

Frontline advisors wouldn't understand the calculation of a DD? Funny, when you call them asking to have your DD reassessed, don't they have to work it out and ensure its accurate? Wouldn't they have a published Standard Operating Procedure (SOP) or Working Practice (WP). Or do they let them make it up?

Furthermore, if the OE thinks that these frontline advisors can't check a system or back office (or even the person sitting next to them who changed it for you 6 months ago) manual recalculation, I think this OE is highly inexperienced in how utility companies have to operate since DD's are one of the highest contributors to incoming call traffic.

If the calculation isn't available to them, tough. It will be in some form of Functional Specification (FS) so is easily obtained via their change management programme office, IS, etc. Perhaps those that created the system or configured any seasonal % variable data items should have published guidance to frontline management. That's hardly your problem.

Quite a poor judgement and doesn't seem independent to me.

snowcat53

Simply appalling.
Picking up just a couple of points:
1. "The investigation officer considered that the SLCs do not set out that each company should provide actual calculations showing why it has changed a Direct Debit payment but that the company should explain why there has been a variation" This is clearly not what the SLC means and the officer is making up their own interpretation. Ruling needed by Ofgem

2. "However, there is no evidence in this case that the calculation is incorrect and that this has had a detrimental affect on the customer"
But with no calculation there is no evidence it is correct either!!

3. "EDF Energy’s systems automatically calculate the direct debit payments and the calculations would not be readily available to the advisors at EDF Energy.

This is why EDF Energy advised it couldprovide you with the calculations but it could not advise you how long it would take."
Deep thought says 42. What a system! I'm concerned this judgement gives them carte blanche to tell us from now on they could dig out the calculation from the innards of their black box but don't have to so tough

Well done for persevering.
But it is depressing.

Regulators asleep at the wheel.

backfoot

Thanks Terry and Snowcat,

It is great to know that I have your support in the face of irrational obstruction. The EO process actually makes me more angry than EDF's original obstruction. The EO is supposed to have expertise but I honestly can't see any. The Review is completely pitiful, took over 11 weeks , and didn't review but simply found ways to support the first pathetic attempt.

I have sent this back to them with a copy to Consumer Affairs, Ofgem:

'It is clear from the initial report and so called 'review' that the Energy Ombudsman has drawn conclusions which are perverse and the complete opposite of that intended in the Regulations (SLC 27) and the Ofgem Guidance Leaflet .Any literal interpretation of the wording leads to a finding that EDF failed both to abide by the Regulations and did not deal with the customer enquiry and subsequent complaint properly. Indeed they went out of their way to make it more difficult.

It is clear that in investigating the complaint, the Energy Ombudsman has worked totally in isolation from Ofgem. It has not sought to seek advice or interpretation of either the SLC or the guidance leaflet even when asked to do so, on Review. Not only that, it has adjudicated in isolation of the documentary evidence provided on the Ofgem website concerning the context and background to the License Modification in 2010.That modification followed a detailed report which amongst other things included transparency and best practice guidelines.

http://www.ofgem.gov.uk/domestic-consumers/Documents1/Direct Debit Report March 2009.pdf

I would suggest a full reading of the document but would highlight the Section on transparency (pages 21 to 24). Also Summary of best practice (page 30).The latter contains the following:

Action to improve transparency and communication
§ suppliers should provide individual explanations to customers of the basis on which their direct debit payments have been reassessed.
§ suppliers should provide clear explanations of how direct debit works, including when customers move onto direct debit.
§ when notifying customers of revised payment levels, suppliers should make clear that customers can contact them to discuss any concerns.
§ customer service staff should have access to the information necessary to enable them to explain clearly to customers the implications of any changes to their direct debit payments.

Despite the above being embodied into a License Modification in 2010 and into an Ofgem Guidance Leaflet, the EO has managed to draw conclusions which are the total opposite of that intended. As a result, you have supported EDF’s shoddy and disdainful customer service practices.

It leaves me with no option but to now pursue a complaint against the EO in order to seek the correct outcome for the benefit of similarly affected customers.'

steve-L

"EDF Energy’s systems automatically calculate the direct debit payments and the calculations would not be readily available to the advisors at EDF Energy."

???????

Translation.....
No-one in EDF understands how they calculate your bill.... or predicted use. We as the regulator don't know either so we should just trust EDF's systems (that noone understands)

Perhaps a change of tack?
Would it be possible to go ahead.... pay.... then have the DD revoked under the DD guarantee (based on they have not provided you with the basis of the calculation) then pay by cheque (based on the only actual you have which is meter reading) with a note saying the DD is set up but obviously incorrect until they provide you with the basis of the calculation....
This will cost them a small fortune in admin fees.... you are keeping to the agreement and have a DD but they are not supplying you with the calculation.
This might happen for a few months....

backfoot

I would imagine they would revoke the DD discount.

I like the thinking outside of the box, but this matter affects all customers seeking to understand their DD's. As a matter of principle, I asked EDF to abide by the clear Regulations. They didn't, and now the EO is blind to the facts and literal meaning of the words.

The whole point of the 2009 Ofgem Investigation was to make it better. Read the report.

That it is no better, should be Ofgem's job to rectify and enforce. For an individaul customer, to have to go to these lengths is ridiculous but I am not one not to try my best.

Daily we see posters asking why their DD's are this or that. It's because it isn't properly explained.

undaunted

I sometimes wonder whether they reach the decision they want to reach & then try to make the reply fit!

Looking at yoyur post

backfoot wrote: »

A) "we do not determine whether there has been a breach of the SLCs."

and

"I cannot require a company to change the way it presents its bills or calculates a direct debit payment providing it is complying with the conditions set out in its licence. If we observe systematic failures, which have a detrimental effect on customers we can and will refer this to the regulator. "

are surely incompatible - as B obviously requires A to be determined in spite of what is said there