RECCo, who set Ofgem’s Retail Energy Code, are in the process of completing a consultation about introducing assurances and accreditations for customers of Third-Party Intermediaries (TPIs). This has led to a draft Code of Practice (CoP) being published which aims to cover the entirety of the non-domestic energy market and will offer accreditation to TPIs who sign up to it. Although the practice will not become a legal requirement, it is hoped that it will generate greater consumer confidence.
The draft CoP has been divided into the following seven guiding principles:
- Transparency & Accuracy- With the aim of empowering customers’ decisions, the principle ensures clarity from the outset of dealing with a TPI by; providing clear communication on how it is remunerated, how it handles and maintains customer data, how it handles and maintains consumption data which is provided to suppliers and how it will not misrepresent the terms & conditions of a contract providing all the relevant information from across the industry for the relevant contract type.
- Transparent Pricing & Product Information- Allowing customers to effectively compare TPIs will facilitate competition in the market and aid full transparency. TPIs should; offer customer-facing documentation on the commission they will receive and how it will be calculated, provide visibility on the suppliers they have approached and the prices for quotes and describe clearly the exact products and services they will offer to the customer.
- Treating Customers Fairly- Treating customers fairly will increase trust and customer engagement within the market and can be achieved through TPIs; ensuring they are offering the relevant contract for the customers needs, ensuring that the material terms of the contract are clearly stated, ensuring that they only represent a change of tenancy with a supplier if reasonable evidence exists, ensuring a Letter of Authority (LOA) is used which is consistent with the template provided in the CoP, ensuring that when a LOA is revoked suppliers are promptly told and ensuring that any termination fees for customers are clearly stated.
- Clear Route for Dispute Resolution- A clear route for ensuring that TPIs address customer complaints is required, this will include; having a robust complaints procedure in place which is available via a website or hardcopy, having a procedure which is maintained and versions regularly updated with access to previous versions being available, having customers who register as a Micro Business Consumer signed up to the Alternate Dispute Resolution, having the ability to register complaints in multiple ways (phone, post or email), having a complaints log which stores information for up to six years and having information on the Energy Ombudsman or other help that is available to customers.
- Appropriate Data Protection Arrangement- Having the correct procedures in place for data protection will promote trust in the market. TPIs should; handle data in accordance with the 2018 Data Protection Act (GDPR), register with the Information Commissioner’s Office (ICO) and pay the data protection fee, have an up-to-date data protection policy and have controls and procedures in place to protect against unauthorised use of data.
- Awareness Training in relation to the CoP- Providing relevant training will ensure that all representatives of a TPI adhere to the CoP, TPIs will be required to; ensure regular training is provided, maintain a log of the training schedule with regular refresher courses and ensure that all representatives continually adhere to the CoP.
- Compliance Processes- TPIs must retain evidence of compliance with the CoP, including telephone conversations, and have appropriate compliance processes in place to check its sales and other activities against the CoP.
LGE welcomes the opportunity to provide greater assurance and accreditation in the retail energy market and looks forward to engaging with the process of creating a CoP to ensure fairer practices and greater transparency. LGE already engages with aspects of the CoP both in terms of its services and practices, such as clearly stating its remuneration costs and being clear on not receiving any additional commission, whilst staff also recently undertook GDPR training to ensure pertinent knowledge and handling of data. Adapting services such as using the CoP’s template for the LOA is something which LGE will be happy to take on. We hope that other TPIs will follow suit, along with suppliers only engaging with accredited TPIs.
The Next Steps:
RECCo is currently looking for feedback on their draft CoP, the full document can be found here, and the call for evidence is open until the 15th September 2023.