Customer Journey Workshop Group Stakeholder briefing

1. Customer Journey Workshop Group Stakeholder briefing 24 July 2008

2. The Consumer Voice Policy Paul Bland Consumer & Competition Policy Directorate

3. Introduction • The new model for consumer representation: the “Consumer Voice” programme • The new National Consumer Council • Redress Schemes • Complaint handling standards

4. Government… • is committed to a robust and effective consumer and competition regime; • one which is fair to consumers as well as business. • Key to success of competitive markets are the confident, empowered consumers who drive them

5. 2004 review of sectoral consumer bodies DTI/HM Treasury report found: • Crucial and effective positive influence by sectoral consumer bodies on regulators and companies. • Significant positive results for consumers which would not otherwise have been achieved. • Scope for consumer bodies to have even closer, more effective, engagement with regulators, companies, Government, and EU. • High proportion of annual budget spent on complaint handling (Energywatch 41%, Postwatch 18% in 2003/4) • Need for regulated service providers to take much more direct responsibility for handling complaints effectively.

6. Rationale for change • Consumers confused about where to go for help. • No single, coherent voice for the consumer • Sectoral consumer bodies do not have powers to enforce resolution. • Need to incentivise companies to deal effectively with complaints.

7. Consumer Voice: vision FUNCTIONCURRENT POSITIONFUTURE STRUCTURE Consumer Direct Enquiries/ information Redress Schemes Resolving complaints Complete and timelyinformation flows Consumer body 2 New National Consumer Council Consumer body 3 Consumer body 1 Regional accountability Policy influencing Research Educating consumers

8. Main “Consumer Voice” provisions: New National Consumer Council, with key functions: Representation Research Information Powers of investigation Specific support for vulnerable consumers New complaint handling standards for gas, electricity and postal services providers; New statutory redress schemes for gas, electricity and postal services. Consumers, Estate Agents and Redress Act 2007

9. Strengthen and streamline consumer advocacy (New NCC) • A new body with critical mass • Even more effective • Able to take cross-cutting view in the regulated sectors • Benefit from experiences in other regulated sectors • Opportunity for more specialists • Closer engagement with Government, regulators, business, EU • More effective engagement with consumers

10. Scope of the redress schemes Gas and electricity: • domestic consumers • micro-enterprises (usage up to £5,000 equivalent; or up to 10 employees or turnover up to €2 million)

11. Redress schemes: process • Secretary of State determines the scope of the scheme • Regulated service providers submit scheme to the regulator for approval • Regulator approves the scheme according to criteria in the Act • Secretary of State makes an Order requiring regulated providers to be members of the redress scheme

12. Questions ?

13. Redress schemes & Complaints handling standards Marcus Clements Head of Consumer Affairs

14. New redress schemes Redress schemes can require members to provide to the complainant: An apology or explanation Payment of compensation Other action in the interest of the complainant Redress schemes are a back-stop, not a “complaint handling” service

15. Redress - approach Effective back-stop for consumers’ complaints Ensure incentives on suppliers to handle complaints effectively are maximised Consider and consult on best practice principles Take into account what we learn from our review of the Energy Supply Ombudsman

16. Redress – Ofgem process Consultation Oct 07 Decision February 08 only approve a scheme if it complied with four core criteria: Independence Accessibility Effectiveness Public accountability Sought applications

17. Redress - approval Received 1 application – tOSl Invited comment key issues Governance / fees / connections / performance tOSl scheme approved - conditional BERR Order 1 October 2008

18. Complaints handling standards - Approach Open minded Protection for consumers Competition

19. Research Six events to: Understand experiences/what is valued/what regulation is expected/ would poor service prompt switching Findings Wide ranging concerns: accessibility, helpfulness, updating, timeliness, resolution Speed v quality Ofgem role – transparency of process and timeliness Complaints experience contributes to decision making Performance data

20. Consultation/visits Consultation November 07 Number of key elements Industry: high level Consumer groups: prescription Supplier visits Variation in practices

21. Decision - Elements of the Standard Decision April – Regulations published 1 July Common definition of a complaint Currently no common standard on what is a complaint Basis on which to compare performance Requirement to record complaints at the point of contact Level playing field Record of complaint if contact again Clock ticking for redress

22. Decision - Elements of the Standard Requirement to have and signpost a complaints procedure Accessibility / transparency / escalation / redress Requirement to signpost the redress scheme Deadlock Time limit

23. Decision - Elements of the Standard Requirement to make arrangements for handling referrals from new NCC / Consumer Direct New NCC Expect suppliers to deal effectively with all customers Vulnerable customers may turn to new NCC for assistance Contact point for new NCC would give extra protection Consumer Direct Build upon energywatch’s empowerment process Make arrangements for referrals

24. Decision - Elements of the Standard Requirement to deal with complaints efficiently and timely Allocate and maintain resource Publish information on complaints Annually Unresolved day +1 Ofgem to consider what information to collect NCC – information gathering power / duty to publish

25. Decision - Elements of the Standard Networks complaints Same obligations (not complaints) Not a competitive market Micro business complaints Same obligations (not complaints) Protection v costs/burden

26. Audit / Best practice review Consistent Embedded properly Consumer confidence 01/10/08

27. Questions?

28. Consumer Direct NorthamptonTom Ballard Consumer Voice Operations Project Officer

29. CDN Set Up Expecting circa 400,000 contacts for both energy and post CDN will have around 60 advisors A new CHS system will be used, IC-Connect A transitional manager acting as Ops Team contact for the transition of CDN into live environment Training material completed for training to start in August

30. Tactical Solution Update Progressing transitional work with CDN implementation team Working with Consumer Focus on referral routes and working level instructions Agreeing referral routes with smaller companies This will also be rolled out to Network Companies Engaging with the Ombudsman service

31. Referrals to Companies Model based on current CD TSS referrals In most circumstances, case will be sent via email with agreed response times If the consumer is unhappy with this process, the call will be transferred via a warm mid call transfer Agreement from companies to answer within an agreed time Developing individual company protocols Feedback mechanisms to ensure quality referrals

32. Urgent / Vulnerable Cases Process for referring urgent cases to Consumer Focus supplier e.g. off supply or threat of disconnection Vulnerable definition has been agreed Complex cases can be deemed to constitute vulnerable cases Consumer Focus will have an Extra Help Unit based in Glasgow who will deal with these cases A dedicated team in Bournemouth will provide technical support and deal with pre-existing cases – potentially for six months

33. Training 3 week programme accredited by Trading Standards Institute Energy and post modules reviewed by Ofgem and Postcomm for technical accuracy Abridged legal module to include SOGA, SOGSA, distance and doorstep selling and s75 CCA End of programme exam and assessed calls Internal Quality Monitoring Officers to monitor

34. Data Collection Set of codes has been developed to record types of issues CD are advising on Developed by CD,EW, Consumer Focus and Ofgem Input from Industry and ERA CD will record what action was needed, e.g. Advice Given, Referral Reviewed after 3 months Possibility of Companies receiving high level reports on these issues

35. Questions ?

36. Customer Journey and role of newNCC newNCC Complaint Handling Model newNCC Interface with Advice Agencies energywatch & Postwatch Closedown and Changeover Plans Neil AveryComplaints Lead

37. Consumer Voice: Contact Model Resolved Enquires Consumer Direct (Tier 1) Referred Escalations to Energy & Postal Companies New consumer Contacts Referred Complaints Calls Letters Web Emails Unresolved Complaints Meeting Redress criteria Redress Scheme (Tier 2) Investigated Complaints to Energy & Postal Companies new NCC (Tier 2) Priority/Off Supply & Vulnerable consumers Other complaints & Complex enquiries new NCC Interim Team Price Comparison & other leaflets newNCC’s Printing & Fulfilment contractor Note: New NCC will also receive referrals from Redress Schemes, Regulators, Advice Agencies (Disconnections & Off Supply cases) & MPs

38. Complaints - CEAR Act Duties & Powers Section 13: Duty to investigate Disconnection/threat of disconnection, refusal to reconnect supply Failure of a prepayment meter, system or payment facility Section 12: Power to investigate Complaints made by or on behalf of a vulnerable consumer Act defines a vulnerable consumer defined as someone that it is not reasonable to expect to pursue the complaint themselves Industry has agreed that a consumer will be treated as vulnerable if they are unable to understand or act on the advice given due to: The urgency of the issue and/or Their personal circumstances and/or The complexity of the issue and/or Detailed guidelines prepared to identify the cases falling within this definition which will be referred by Consumer Direct to newNCC

39. Referral of vulnerable consumers High Consumer Direct refers disconnection, off supply & other vulnerable cases to newNCC Personal Circumstances (help required to resolve case) Consumer Direct resolves by referral to escalated supplier team Consumer Direct resolves by advice Low Low High Urgency or Complexity of Issue

40. newNCC Complaint Handling Essential to ensure operational readiness for 1st October Key area of reputational risk (avoid Terminal 5 scenario) Retain some extra capacity and contingency for transitional period Minimise changes required to systems/processes during transition Extra Help Unit Largely resourced from energywatch Glasgow staff Majority of workload will be energy cases Use energywatch service mail system Adapt energywatch complaint handling processes Research on needs and service preferences of vulnerable consumers Agreed Vulnerable definition Establish protocols to support referral pathways Agree Complaint Handling Model with Industry

41. Role of Extra Help Unit Referrals of Vulnerable energy cases from Consumer Direct, Ofgem and Redress Scheme Referrals of Disconnection cases from Consumer Direct, Ofgem and Advice Agencies Referrals of Vulnerable postal cases from Consumer Direct, Postcomm and Redress Scheme Referrals from MPs Provision of support and information to Advice Agencies

42. Interim Team(Oct 2008 to March 2009) Clear residual live energy cases (postal cases handled in Belfast) Handle follow up contacts on cases closed in previous quarter Support Extra Help Unit on vulnerable cases (until EHU is fully staffed) Receive, sort/scan letters (until redirected to Consumer Direct) Forward new non vulnerable cases to Consumer Direct and Network Change consultation responses to Belfast Forward vulnerable cases to Extra Help Unit Provide back up advice to Consumer Direct on complex enquiries Support Call Centre on any non vulnerable cases which cannot be resolved by empowerment and are out of scope for Redress Scheme Handle any High Level/MP cases (until migrated to Extra Help Unit)

43. newNCC Complaint Handling Case types Priority Cases (s13 Duties): Disconnection & PPM Off Supply Vulnerable Cases (s12 Powers - Vulnerable Guidelines) Investigated Complaints Empowered Complaints Enquiries Signpost/Referral to Energy Ombudsman Other cases (mainly MPs) Out of Scope Cases

44. Complaint Handling – Priority Cases • newNCC • Customer call transferred • from Consumer Direct or • other agency • Establish facts, advise • consumer & update • Servicemail • Telephone supplier, agree • actions & request GSS or • goodwill payment (if • appropriate) Supplier Arranges appointment with metering agent and/or takes appropriate action. Provides update to newNCC. newNCC Contacts consumer to make sure agreed actions undertaken and consumer satisfied. Closes case or escalates to supplier if not resolved newNCC Contacts consumer and provides update Definition: Priority cases are disconnections, threatened disconnections or prepayment off supply cases. Targets: 95% of cases resolved by next working day. Consumer’s supply restored within 3 or 4 hours (per Guaranteed Standards)

45. Complaint Handling – Vulnerable Cases Stage 1 Stage 2 Stage 3 Case closed • newNCC • Receive case from • Consumer Direct or • other agency & record in • servicemail • Initial Investigation • Email/telephone supplier • Acknowledge to consumer • In 2 working days Supplier Investigate and respond to consumer and newNCC within 10 working days • newNCC • Receive and review • response from • supplier within 10 • working days • Discuss with consumer • & close case or • challenge supplier • Targets (Investigated Complaints) • 75% of cases resolved in 35 working days • 95% of cases resolved in 66 working days

46. newNCC Complaint Handling Empowered Complaints (Mid Call Transfer or Email) Vulnerable consumer referred by Consumer Direct but now able to deal directly with Company Enquiries (Target: Resolve 95% in 10 working days) Consumer not dealt with supplier but unable to do so Information required from previous supplier to resolve a complaint Signpost or Referral to Energy Ombudsman newNCC and consumer unhappy with response from company Out of Scope Consumer signposted to other advice agency because issue is outside newNCC’s remit

47. Complaints Workload and Resources • Notes: • Transition resource includes provision for handling 2000 non vulnerable cases, support for Consumer Direct, handling redirected correspondence, work on residual energy/post cases & contingency provision • 2. Resources include management, supervision and administrative support, but excludes support for advice agencies and responses to web questions.

48. Business Consumers newNCC Board has agreed that the Extra Help Unit will handle referrals of: Vulnerable micro businesses from Consumer Direct Micro business disconnection and off supply cases from Consumer Direct and other agencies Sole traders are within scope of newNCC’s s13 duties for disconnection/off supply cases Other micro business disconnection and off supply cases are within scope of newNCC’s s12 powers for helping vulnerable consumers Number of cases from vulnerable business consumers is expected to be small and most cases should be resolved by the Energy Ombudsman.

49. External Interfaces Provision of support to enable advice agencies to deal directly with most vulnerable consumers (without need to refer to newNCC) Access to consumer intelligence to support Company Performance and Campaigns activity Direct referral of disconnection/off supply cases Agree arrangements with Consumer Direct for transfer of other vulnerable cases

50. Support to Advice Agencies Training Materials and Training Delivery Fact Sheets & Consumer Leaflets Price Comparison Leaflets newNCC Knowledge Base or Manual Ask a Question facility Ask the Advisor Telephone Service