Government looking into TPI operation in retail marketThe government is investigating third party intermediary (TPI) operation in the retail energy market.
Energy Brokers Under Investigation
The government is investigating third party intermediary (TPI) operation in the retail energy market. Launched on 16 August, the call for evidence is seeking views on: information transparency; contracting and sales arrangements; customer service arrangements and wider customer protections; out-of-court dispute resolution; and energy system risks.
The government is also seeking views to inform the design of any future regulatory intervention if required. It is focused on both domestic and business customers.
The call for evidence focuses on the following types of TPIs: Price Comparison Website; auto-switching and auto-recommendation services; bill-splitters; brokers and consultants; and load controllers who can control or impact customer energy usage using communication networks.
Ofgem estimates that more than 1,000 TPIs operate in the non-domestic retail market, with TPIs the most common way that customers decide to engage in the market.
Around 49% of domestic customers used a price comparison website in 2019 and 67% of small (fewer than 50 employees) or microbusiness customers used a broker in 2018.
The government is calling for evidence on the issue of harm to consumers and there are several areas it is requesting information on:
> A lack of information transparency about market coverage and commercial arrangements with suppliers or other relevant market participants.
> Issues arising during the contracting process or from sales practices, including a lack of transparency, mis-selling or misrepresentation, and where customers sign up to a service inappropriate to their needs.
> Adequacy of customer service arrangements and wider protections offered to customers, including customers in vulnerable situations and who may require additional support.
> The ability for customers to resolve disputes where they are dissatisfied or experiencing issues with the contracted product or service, including the need to access alternative out-of-court dispute resolution.
It should also be proportionate to the harm or risk of harm identified, and not act as a barrier to innovation or distorting competition.
It should also seek to achieve a coherent approach to regulation of TPIs across sectors where possible, as well as be reflective of the significant number and variety of TPIs operating in the market, including where differences exist across or within each type of TPI.
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