Security Deposit caution - So Energy, maybe others

WiserMiser

Time to go to the Energy Ombudsman.

MattMattMattUK

WiserMiser said:

Time to go to the Energy Ombudsman.

On what basis? I can see nothing in this post that indicates this is anything that the Ombudsman should be involved with.

diyeco

Thank you both re the Energy Ombudsman ('EO'). I have not included here that my experience with So Energy is the subject of 2 complaints.  So Energy attempted to address these (badly IMO, continuing to dig themselves deeper), they have now gone silent.  Either they are ignoring me, or hopefully actually looking onto the issues e.g. as above they have amended the FAQ page.

My understanding is I only go to the EO when the complaint procedure is complete / deadlocked, and after 8 weeks.  I am communicating with Ofgem, since this may be a loophole in their rules - but not as a complaint, but questions/points.

Thoughts welcome...

Bendo

MattMattMattUK said:

WiserMiser said:

Time to go to the Energy Ombudsman.

On what basis? I can see nothing in this post that indicates this is anything that the Ombudsman should be involved with.

If they can't / won't explain whether this "security deposit" is excluded from ofgem protections of credit balances, it would seem reasonable to escalate it further.

t0rt0ise

If the security deposit is paid by phone, do they send a receipt?

WiserMiser

MattMattMattUK said:

WiserMiser said:

Time to go to the Energy Ombudsman.

On what basis? I can see nothing in this post that indicates this is anything that the Ombudsman should be involved with.

Basically as the OP says.

• It encourages criminals to steal via phishing scams.
• Even if they're being ultra cautious, there's no possible justification in keeping the deposit for umpteen years.  12 months' worth of successful DDs will have confirmed the customer's identity; should they suddenly default, they can be pursued via the courts and blacklisted via the credit rating companies.
• It deters customers from switching suppliers.  They often have to take quite a hit by waiting several weeks for credit to be refunded from their old supplier, and new suppliers often claim the first DD on the start date or even beforehand. If all suppliers required everlasting deposits, many JAMs would never be able to switch.  An uncompetitive market puts up prices for everyone.
• It gives the appearance of funding their business, and we all know how that helped to bring about 30 suppliers going bust, costing each household over £90.
• It's not protected if SO Energy goes bust.

I think that's more than enough to justify a complaint.

diyeco

OK, So Energy have now replied by email.  In essence they claim the Security Deposit is protected by their own ring fencing, but do admit:
"The security deposit will not get transferred to the SoLR; it will get reimbursed to the customer."

This confirms the way So Energy set the Security Deposit up, it avoids being protected under the SoLR rules, and as per Ofgem's response to me:
"If a failed supplier holds a security deposit against a customers account, unless an agreement has already been arranged between the administrator and Supplier of Last Resort, the customer would need to contact the failed supplier’s administrator to be registered as a creditor to claim the security deposit back."

In summary, to me, So Energy's Security Deposit is not protected the way customers would expect, and depending on how they failed, you would just be in a long list of creditors under the administrator.

On TrustPilot So Energy now claim:
"Ofgem’s Supplier of Last Resort (SoLR) process guarantees protection for credit balances, but not for security deposits. This is an Ofgem policy that applies industry-wide."
i.e. So Energy claim that Security Deposits are NOT protected for any supplier, and that is Ofgem policy.  Ofgem's response to me differs from that, so I will check with them...

Bendo

I may be wrong,  but I expect Ofgem to take a dim view of that as it flies in the face of the consumer protection that is legislated for in the event a supplier goes bust. 

wrf12345

Surely if you are smart meter you could ask to swap to prepayment which then should not need a security deposit as you will have to preload the meter?

bristolleedsfan

diyeco said:

OK, So Energy have now replied by email.  In essence they claim the Security Deposit is protected by their own ring fencing, but do admit:

Irony is So Energy voiced opposition to compulsory ring fencing of customer balances.
https://www.cityam.com/exclusive-so-energy-criticises-ringfencing-proposals-amid-deepening-industry-row/