If you can’t beat ‘em, refuse to join ‘em...

A simple small business/energy supplier conversation: a customer asks to add his son to the account so he can manage the company’s transactions going forward. All is fine and nothing unusual there you might think.

But a quick call to the customer confirms he doesn’t actually have a son, or any children for that matter, and is keen to run his own business himself, in his own way.

That is just one real-life example of some of the challenges we face in making sure we do our bit to stamp out unscrupulous behaviour in the small business energy market – efforts which started nearly a decade ago now with the creation of our independent TPI Code of Practice.

Increasingly – and I’m talking an average of 5-10% of incoming contact in recent months – we’re being presented with a Letter of Authority (LOA) seemingly signed by a customer and giving permission for someone else to manage their account, agree terms or sign contracts on their behalf.

Except in those one-in-ten cases, that LOA wasn’t signed by the customer, or was signed without their full knowledge and consent.

When I talk to microbusiness customers – and I do, a lot – many of them talk of poor experiences in the market and the changes they want to see: no more being hounded by sales calls from brokers, with many of these calls leaving them less than clear on who they’re talking to, who they represent and exactly how (and how much) they get paid.

The energy regulator, Ofgem, is reviewing the small business energy market and looking particularly at the role of brokers and the services they provide. But that review could at least another year before substantive action results from it.

Taking a stand against bad behaviour

So we’re taking a stand and we’ll no longer be accepting Letters of Authority from any broker that does not have an agreement with us, where they have not signed up to the sales standards set down in our code of practice.

Where we do have a relationship in place with a TPI we accept all LOA requests without question but for those brokers yet to sign up to our Code of Practice we’ll seek our own verbal or written confirmation from the customer. This means non-registered brokers will no longer be able to access customer data or manage customers’ accounts on their behalf.

I know this move may not land well in all sectors and it may reduce the amount of TPIs wanting to work with us, but we strongly believe it’s the right decision. Ultimately, we hope by leading the way we can help make the energy market a better place for our customers.

We’re no strangers to taking a stand against poor behaviour in this market and doing what we can to protect our small business customers – as shown by our own TPI Code of Practice (also adopted internally by our own sales teams) which was created back in 2012 to improve relationships with customers and provide a fairer, more transparent service.

Because it’s not just us (and our customers) demanding action in this space.

The recent Citizens Advice report on the microbusiness energy market set out a series of recommendations to improve service for customers:

·      TPIs should be transparent on commission, market coverage, and any fees should appear on bills

·      Government should introduce appropriate regulation for brokers and other third-party intermediaries

·      Ofgem should evaluate the experience of vulnerable microbusiness consumers in the non-domestic sector

With our TPI Code, we took a stand, even though it has cost us financially and still does today. Sticking to our code has seen us reduce by more than half the number of TPIs that we will work with, and helped those brokers we do work with to deliver the same high standards as our own direct sales teams. In return we have seen customer complaints fall to our lowest ever levels, as evidenced by our #1 position in the Citizens Advice non-domestic league table and our own internal satisfaction tracking.

We have clear evidence that with the right controls and support in place, a core of professional TPIs can provide a valuable, transparent, compliant service for UK businesses.

That’s what we’re doing to make life better for our customers. And it’s working. But there’s only so much we can do. TPIs, other suppliers and Ofgem need to play their part too, for the good of the industry, and for all our customers.

 

By Iain Walker, Director of Energy Sales, E.ON