Energy firms have been told to improve their customer billing or face tough regulatory action, including fines, industry regulator Ofgem has said. Ofgem called for an independent body to investigate and resolve billing errors, with the power to award compensation.
In addition, firms must curb "back billing", failing to issue a bill to new customers only to hit them much later with a large payment demand.
Ofgem has given firms a year to comply or face regulatory action.
 |  Suppliers can get things wrong...this can cause customers real distress |
The regulator urged firms to review their terms and conditions to ensure that they comply with consumer rights legislation.
"For the vast majority of customers, the energy market works well. But suppliers can get things wrong and when they do... this can cause customers real distress and hardship," Alistair Buchanan, Ofgem chief executive, said.
Ofgem has given firms a year to get their house in order and improve billing arrangements.
Ultimately, Ofgem has the power to impose fines on firms of up to 10% of turnover.
Super complaint
| Ofgem's recommendations Independent body to arbitrate on billing complaints No back billing beyond two years moving to one year in 2007 Suppliers to review their terms and conditions |
Ofgem's move is in response to a "super complaint" from Energywatch.
Under the Enterprise Act 2002, consumer bodies, such as Energywatch, can use a super complaint to bring particular issues to the attention of regulators.
Energywatch received 40,000 complaints last year, including gripes about firms failing to deliver bills for months and sometimes years.
Energywatch said it had become increasingly fed up with "incompetence" over billing and said suppliers had consistently failed to address the issue.
It said customers were being sent bills which were not their own, or which were too high. Despite the mistakes, customers were being threatened with being cut off for not paying.
In one area, the consumer group said that more than a hundred pensioners on an estate went unbilled for at least six months.
| A win-win situation for consumers is within sight if companies can make billing both timely and accurate |
Energywatch, chief executive, Alan Asher, welcomed Ofgem's recommendations.
"A win-win situation for consumers is within sight if companies can make billing both timely and accurate. Consumers need certainty that they will get a bill which is accurate, comprehensible and on time," Mr Asher said.
As part of its investigation, Ofgem invited views from energy suppliers.
The Energy Retail Association (Era), representing suppliers, said that "although energy suppliers are yet to see Ofgem's full report, the industry is already committed to providing the best service for their customers".
"The industry has been listening to what its customers want and will look carefully Ofgem's recommendations," said Duncan Sedgwick, chief executive of Era.
"Consumers want ever more accurate bills and the energy industry is developing a range of measures to make this happen."
One-Minute World News 
News services
E-mail this to a friend 
Printable version 
