Energy firms must compensate consumers £30 for these mistakes from May

Energy companies will be compelled to compensate customers from May (Shutterstock)

Energy firms will be compelled to pay customers compensation if they a switch to a new supplier goes wrong.

New regulations released by Ofgem mean that customers will automatically receive compensation of £30 if a supplier fails to complete a switch within 15 working days

Old suppliers will also be fined if they fail to issue customers with a final bill within six weeks.

Six million people switched supplier in 2019, and Ofgem said that the introduction of regulations would give customers shopping around for a better deal "peace of mind".

The rules in question will be introduced in May of this year.

6.4m changed supplier in 2019

Ofgem’s new set of standards are part of a promise to deliver faster and more reliable switching.

In a statement Mary Starks of Ofgem said:“More customers are switching than ever, with a record 6.4 million changing supplier in 2019.

"But we also know that a minority can still experience problems when they switch.

“As part of our commitment to protecting consumers and enabling competition, we are introducing these new standards to give customers further peace of mind, and to challenge suppliers to get it right first time.

“Going forward, we will continue working with suppliers and consumer groups to deliver our programme for faster and more reliable switching and ensure these arrangements are fit for the future.”

David Pilling, head of policy and public affairs at the Energy Ombudsman, concurred with Starks.

He said: “switching is now second only to billing as a source of complaints that we handle, so it’s clear that for too many people the process of changing supplier doesn’t go as smoothly as it should.

“The introduction of automatic compensation is a welcome intervention by the regulator. It offers consumers access to immediate redress and gives suppliers a financial incentive to get switches right first time.

More than £700,000 claimed in 2019

Ofgem released the first of a series of guaranteed standards in 2019 and since then more than £700,000 of fines have been paid out to customers.

The first wave of rules would see suppliers punished for failing to spot or correct switching errors, and for failing to refund credit balance to customers.

Of the £700,000, 27% of the payments were incurred for mistaken switches, while 73% were due to late credit balance refunds.