UK's cheapest energy supplier Iresa banned from taking on new customers

UK's cheapest energy supplier Iresa banned from taking on new customers

Offshore Technology International -
Britain's cheapest energy supplier Iresa Energy has closed the door to new customers for a second time as the regulator toughens up the ongoing concerns over its customer service.

After months of complaints from disgruntled customers Ofgem banned the supplier from signing up more customers and warned that it could shut down Iresa entirely unless it quickly improves service standards.

Ofgem has kept a close eye on Iresa since February due to rising concerns that the Nottingham-based energy supplier was breaking customer service rules. It has still been able to take on new customers since then, despite being under review.

The regulator’s clampdown today is the second time in less than 12 months that Ofgem has put the brakes on Iresa, which has used rock-bottom prices to lure in customers despite repeated complaints.

Iresa first closed its doors to new customers in April last year after the regulator warned the company to get a handle on an increasing number of complaints from its customers.

At the time, Ofgem said it had become aware that Iresa’s customers were struggling to get hold of customer service representatives to raise queries and complaints.

Dermot Nolan, chief executive of Ofgem, said today that unless Iresa quickly falls into line it will be stripped of its licence to supply homes with gas and power.

Citizens Advice first referred the company to Ofgem in November last year after receiving a flurry of complaints from customers over unexpected hikes to direct debit payments. Customers also took to social media, with some complaining of 20pc debit hikes, and others venting their frustration over long call waiting times to resolve their concerns.

Ofgem has ordered Iresa to clear its backlog of customer emails and log all existing customer complaints. It said fresh customer service calls should be answered in under five minutes, while emails should receive a reply in less than a week. Iresa must also identify all of its vulnerable customers, and offer to put them on a priority services register, Ofgem said.

“This order sends out a very clear message to suppliers that where they fail their customers on service, Ofgem will step in and take strong action,” Mr Nolan said.

“It’s crucial that all suppliers provide customers with good service, including acting quickly and effectively to sort things out wherever problems occur.”

“Iresa now needs to act quickly and put its house in order otherwise ultimately its licence could be revoked,” Mr Nolan added.

But the latest round of concerns over Iresa has reignited concerns that Ofgem does not adequately protect the market against poor service by setting its standards for new entrants too low.

Gillian Guy, chief executive of Citizens Advice, said Ofgem must go further.

“The regulator should tighten up its licensing regime so they can prevent poorly prepared suppliers from entering the market in the first place,”
she said.

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