HOUSEHOLDS will be able to switch their energy supplier within seven days, under plans being considered by Ministers.
Officials are looking at replicating the banking switch guarantee, which lets people easily change current accounts, in the energy industry. This could lead to customers saving hundreds of pounds a year.
A source familiar with the plans said switching would become a ‘one-click process’ by improving the way data is securely shared between energy firms, adding that the goal is to ‘take seven-day current account switching and clone it’.
The reforms, which are being worked on as part of the Data Protection and Digital Information Bill, would save consumers money by boosting competition in the sector.
At present, energy regulator Ofgem requires energy companies to help customers switch within 21 days, but in practice this process can take far longer and is prone to errors.
In some cases, customers waited more than 100 days to change provider. Complaints to the Energy Ombudsman hit a record high last year, with switching problems being one of the main causes of complaint. Of the total cases heard, 75 per cent ended up being resolved in the customer’s favour.
In 2013, then-Chancellor George Osborne introduced the Current Account Switch Service, which put the onus on banks to help people move accounts – and guaranteed it would be done in seven days.
Conservative MP John Penrose said the UK’s open-banking rules, which facilitate data sharing between financial institutions, should be replicated across ‘broadband, energy and water bills as soon as possible’. He called on Ministers to set out a timeline ‘within weeks’.
In the Autumn Statement, Chancellor Jeremy Hunt said the Government will ‘kickstart a Smart Data Big Bang’ and explore ‘innovative opportunities across seven sectors: energy, banking, finance, retail, transport, homebuying and telecoms.’
Business Minister Kevin Hollinrake has told MPs a timetable for the reforms should be set out next month. He said: ‘We are planning to open up databases right across our economy to allow for more competition in the worlds of energy, telecoms, and buying and selling houses.’
Former Digital Minister Matt Warman said: ‘Too many companies take advantage of customers’ loyalty. Making it easier to switch will save people money and make sure businesses aren’t tempted to be unscrupulous.’
Consumer expert James Daley, founder of Fairer Finance, said: ‘There is definitely a need to help people switch more easily. A lot of people feel overwhelmed, particularly in the past few years when bills have become enormous.’
He also urged Ministers to introduce a ‘consumer duty’ on energy giants to ‘put an onus on firms to help customers get the best deal’.