Ofgem is stepping up its efforts to ensure bills are transparent to consumers by undertaking a market research programme to identify “best practice” language and formats to support enhanced clarity and engagement.
The research project is set to form new rules for billing, which will identify the key words or phrases for companies to use or avoid in energy bills, annual statements and price rise notifications.
An Ofgem spokesman says: “We need to help energy customers engage more with the energy market because many find it confusing to pick out a good deal. This project could lead to a possible standardisation of the language suppliers can use.”
Ofgem claimed earlier this year, when it launched its retail market review, that consumers were “bamboozled” by the complex tariffs on communications from their energy companies. It claims the number of tariffs in the market has increased from 180 in 2008 to about 400 in 2011.
It is hoped that simpler tariffs will expose the “Big Six” energy companies’ expensive prices to the consumer, which will allow them to make more informed decisions when choosing a supplier – potentially allowing smaller companies to be competitive in the market.
Ofgem will publish the full proposals for its energy market overhaul in 2012. The Big Six can then decide whether to accept Ofgem’s proposals or appeal some or all of the reforms to the Competition Commission.
The proposals are already supported by Consumer Focus, Which?, Age UK, uSwitch, the Citizens Advice Bureau and small energy suppliers.