Ofgem to look at licensing regime after Iresa fiasco

Ofgem outlined the scope of its review of its approach to licensing energy suppliers on Monday.

The regulator said the current licensing regime had helped boost competition in the energy market, giving consumers more suppliers “than ever before” to choose from.

It said the review would include Ofgem’s approach to supplier licensing, to ensure that appropriate protections were in place against poor customer service and financial instability.

“Ofgem committed to carrying out this work in its Forward Work Programme for the current financial year which was published in March,” the company said.

It comes after Ofgem banned the UK’s cheapest energy retailer, the privately-held Iresa Energy, from taking on new customers, increasing existing direct debits, or asking existing customers for one-off payments for a period of three months.

Iresa had come under fire from both the regulator and consumer advocacy groups for its shoddy customer service - or apparent lack of service - after debiting customers’ bank accounts for extra payments with little notice earlier in the year.

“Ofgem will publish a consultation on our proposals arising from the review in late summer,” the regulator said.