Enforceable standards of conduct for suppliers so smaller businesses get fairer treatment.

Ofgem’s proposed new standards of conduct for how suppliers should treat Britain’s smallest businesses are due to come into force from this summer. These substantial reforms support action Ofgem is also taking on clearer contracts, back – billing and on new powers to tackle misselling to businesses.

Ofgem will also be reviewing whether or not automatic roll-over of contracts for businesses should be banned altogether. The new enforceable standards will require suppliers to treat firms, which typically spend up to £ 10,000 per fuel on gas and electricity, in an honest, transparent and professional way. This will apply to when suppliers are billing, contracting with and switching customers.

Andrew Wright, Senior Partner, Markets, said:
“This summer marks the start of a fairer energy market for both households and businesses. Suppliers will have to make sure they treat small businesses fairly – or risk facing fines.

“Businesses told us they want more protection and clearer information on contracts and bills. Our proposed reforms and protection measures will ensure this happens – by making it far easier for them to engage in the market.”

The standards mean suppliers will have to act promptly to put things right when they have made a mistake, for example wrongly stopping a business from switching. They will al so have to treat businesses more fairly when back – billing – which is a major concern to some small companies. So that the smallest firms know when they can compare the market, Ofgem will require suppliers to put the contract end date on all bills. To help cut the number of companies that are unwittingly rolled over onto new contracts; Ofgem will also allow smaller businesses much longer to tell their supplier they want to switch at the end of their deal.

Ofgem is also proposing extending safeguards so that up to 160, 000 more small businesses get clear information on the key facts about their contracts. They will also benefit from the limit on the automatic roll-over of contracts to one year. These safeguards currently apply to businesses spending up to roughly £5,000 a year per fuel and will now be expanded to firms paying up to about £10,000 per year per fuel. These changes will also be in place by the end of the year.

Ofgem also wants to tackle rogue brokers that are misselling energy to businesses  and has asked Government for more powers in this area. The action Ofgem is taking includes working with suppliers and brokers to develop an industry – wide code of practice for brokers. The code will give confidence to businesses that brokers are behaving fairly and in a transparent way.