Energy firm banned from taking on new customers

Energy firm Iresa has been banned from accepting new customers until it starts to clear a backlog of complaints.

The Nottinghamshire-based firm is among scores of smaller suppliers taking on the big six energy firms. It regularly appears on price comparison tables.

Issues such as a 40-minute average wait for answering calls and concerns from vulnerable customers has led to a rare intervention by the regulator.

Iresa apologised and said it was improving its service.

When BBC News attempted to contact the company, our call was said to be 38th in the queue.

A later emailed statement from the company said: "We are confident that our customers will see a noticeable improvement in our customer service response times and we apologise to customers who we have let down in the past.

"We are committed to improving our quality of service to deliver a much better customer experience."

Investigation

Iresa is already facing an investigation from energy regulator Ofgem into whether the firm treated customers fairly in its call-handling and complaints process.

Concerns included unexpected increases in direct debit demands, an inability for customers to log complaints, and the firm not having a system to identify and manage potentially vulnerable customers.

Ofgem is examining whether Iresa gave sufficient notice to customers facing financial difficulty that debt repayments were being taken out of their accounts.

Customers have complained of long waits on the phone or a lack of response to enquiries, with many venting their frustrations on social media.

In the latest move by the regulator, Iresa has been banned from taking on new customers, increasing direct debits or asking for one-off payments for up to three months.

The company has been ordered, during that period, to extend call centre hours, to bring down average call waiting times to below five minutes, to respond to customer emails within five working days, to clear a backlog of consumer emails, to log customer complaints, and to offer to add vulnerable customers to a priority services register.

Failure to do so could potentially lead Ofgem to revoke Iresa's licence to operate.

"This order sends out a very clear message to suppliers that where they fail their customers on service, Ofgem will step in and take strong action," said Dermot Nolan, chief executive of Ofgem.

"It's crucial that all suppliers provide customers with good service, including acting quickly and effectively to sort things out wherever problems occur."

Citizens Advice, which highlighted concerns among Iresa customers, said the regulator's move was welcome, but the problems should never have been allowed to develop.

"The regulator should tighten up its licensing regime so they can prevent poorly prepared suppliers from entering the market in the first place," said Citizens Advice chief executive Gillian Guy,

This is Iresa's second ban on new business. It stopped taking new customers temporarily in early 2016, after Ofgem found that customers were having trouble getting in touch with the energy provider.