Objecting in the domestic market
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| Joanne Taylor
Special Projects Manager Ofgem 9 Millbank LONDON SW1P 3GE. 15 November 2002 Dear Jo Objecting in the domestic market.Thank you for the opportunity to comment on Ofgem’s proposals to amend the rules that permit suppliers to object to domestic transfers. Firstly, in respect of the ability to object on grounds of insufficient termination notice, Atlantic fully supports Ofgem’s intention to prevent this type of objection in future. Any proposal which increases customers’ mobility between suppliers is to be applauded and encouraged. We also believe that it will deliver enhanced customer service. Despite not being in the Termination Notice Trial, for some time now, it has been Atlantic’s policy not to seek termination notices from customers. It is our view that, if a customer wishes to switch supplier, we should not hold them to a 28-day notice period. However, Atlantic does have serious reservations about Ofgem’s proposal to allow the losing supplier to object to a proposed transfer taking place after a request from a customer. We believe that many suppliers will use this new process, not in the interests of customers, but as a retention tool. For various reasons, attracting new customers is becoming increasingly challenging for companies. This, along with the corporate consolidation that has been happening within the industry for some time now, means that many suppliers will no longer follow acquisition strategies but will, increasingly, simply look to retain the customer base they currently have. This proposal will only make that easier for them and the result will be the end of the fragile competitive market we have in the UK. We already have a great deal of anecdotal evidence that losing suppliers contact customers we have signed in an effort to persuade them to change their minds. Only today, one of our customers rang to say that they had been contacted by their previous supplier to tell them that Atlantic “had a very high standing charge” whilst they had no standing charge at all. What they failed to explain to them was that Atlantic’s unit rate is much lower than their own and that, overall, the customer would make significant savings with Atlantic. With the new objection process, that company would have been able to convince the customer that they had made the wrong decision in switching to Atlantic and prevent the transfer going ahead. We believe that this would have very significant implications for the competitive market. We are extremely concerned that there is currently no regulation or oversight of the “win-back” process by Ofgem. By contrast, the sales process is heavily regulated by various authorities (for example, any advertising must be “legal, decent, honest and truthful”) and, yet, there is no similar scrutiny or, even, approval of, the claims made during the “win-back” process. For this reason, we have very real concerns that the new objection process could be mis-used. Whilst we appreciate that Ofgem has attempted to put various safeguards in place, we do not believe that they will be effective and we strongly believe that the losing supplier should not be given the opportunity to solicit or action requests from customers to stop the transfer going ahead. What would be effective would be if customers were advised to contact the gaining supplier who would then initiate the co-operative objection. In our case, we would be happy to guarantee this process and to record all such conversations with customers, with those recordings being audited by an independent source at our own expense. The current objections process is open to abuse (and is abused) and we, therefore, have no reason to believe that the proposed safeguards will be any more effective in preventing suppliers’ misuse of the process. The energy market is becoming increasingly dominated by three or four large companies. Perhaps this consolidation will increase still further in the future. Atlantic is the only significant new entrant in the domestic market at the moment – partly because other new entrants have exited the market as they have found the competitive conditions too tough. We believe that this proposal will increase further the opportunities for the ex-PESs to retain the market share they inherited at de-regulation and will make it even more difficult for new entrants to challenge the status quo. This proposal, as currently drafted, can not, therefore, be in the long-term interests of customers. I cannot stress strongly enough how concerned Atlantic is about these proposals. If you would like to discuss any of these points further, please call me. Yours sincerely, Siobhan O’Loughlin Regulation Officer Directory: ofgem-publications ofgem-publications -> Re: Proposed debt assignment protocol for prepayment customers ofgem-publications -> Annette Lovell Head of Customer Contact and Compliance Download 12 Kb. Share with your friends:
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