Ofgem consults on changes to tariff options

Ofgem has put out its final proposals aimed at helping customers make informed choices about their energy tariff.

The consultation forms part of the regulator’s commitment to rely more on enforceable principles rather than detailed rules about how suppliers should run their businesses. Last year, Ofgem removed around 30 pages of prescriptive “Simpler Tariff Choices” rules, such as the four tariff cap, that had originated from the 2013 Retail Market Review (RMR).

The new consultation sets out proposals to remove the majority of prescription from the sales and marketing licence condition, standard licence condition 25, and replace it with five narrow principles – three aimed at promoting tariff comparability and two requiring responsible sales and marketing practices.

The proposed principles are:

1. The licensee must ensure that the structure, terms and conditions of its tariffs are clear and easily comprehensible.
2. The licensee must ensure that its tariffs are easily distinguishable from each other.
3. The licensee must ensure that it puts in place information, services and/or tools to enable each domestic customer to easily compare and select appropriate tariffs within its offering, taking into account that domestic customer’s characteristics and/or preferences.
4. The licensee must not, and must ensure that its representatives do not, mislead or otherwise use inappropriate tactics, including high pressure sales techniques, when selling or marketing to domestic customers.
5. The licensee must only recommend, and must ensure that its representatives only recommend, to a domestic customer products and/or services which are appropriate to that domestic customer’s characteristics and/or preferences.

Read the full document: Enabling consumers to make informed choices

Responses should be sent to FutureRetailRegulation@ofgem.gov.uk by 6 March 2017.

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