Ofgem accuses utility operators of unfair pricing

Ofgem has proposed measures to ban unfair price differences among utility operators following a probe into the sector. It has also concluded however that there is no evidence of a cartel within the industry.

The regulator published its findings today (October 6) after launching an
investigation in February this year.

Ofgem says some utility companies’ practices are failing households and has proposed ways to ban unfair price differences, such as the differences between direct debit rates and prepayment meters.

During the seven-month probe, the regulator says it was “particularly concerned to see behaviour by supply companies that was hitting the 4.3 million consumers without gas supply”.

Ofgem says however at the same time, competition is generating “a wide range of tariffs and products” and it has found no evidence of a cartel. It adds: “There is a strong consumer awareness – and satisfaction with switching.”

The regulator has proposed measures to ban unfair price differences, tougher rules on doorstep selling and more transparency in energy suppliers’ financial reporting. It has also put new requirements on suppliers to provide information to help consumers get the best deal.

The report marks the start of a consultation on Ofgem’s findings and proposals that will close on December 1. If the industry fails to deliver, it can be referred to the Competition Commission.

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