Ofwat’s Customer Protection Code of Practice (CPCoP) outlines the minimum standards of service that Retailers must maintain for customers they supply in England and Wales. It’s important in making sure the interests of non-household customers are protected.
Since its implementation when the business retail water market opened in 2017, there’s been nine consultations to amend aspects of the code, ranging from enabling Micro-Businesses to conclude a contract orally, increased customer credit protections and applying additional customer protection measures during the COVID-19 pandemic. However, until now there’s been no review of the entire CPCoP.
With the market being in operation for nearly seven years, Ofwat decided to review the extent to which the CPCoP is providing effective protection for business customers and consider whether changes may be necessary. Wave supported a review as the market continues to evolve and customer expectations develop.
The call for inputs
In April 2023, Ofwat released a Call for Inputs (CFI) asking for input on how the CPCoP could be strengthened. It specifically asked for views on areas including whether levels of protection should be different for customers depending on size or vulnerability, whether protections needed to be increased for emergency events and whether changes were needed to increase customer awareness. It also asked for views on anything missing and whether there were contents that had become redundant.
We welcomed the review as there were some areas that needed changes, for example, areas that were unclear and subject to different interpretations which resulted in differing customer protection. We supported changes which provided clear minimum standards for customers, leaving Retailers able to develop new, different and innovative services above the requirements as competitive offerings creating greater customer choice.
Tranche 1 Consultation
In September 2023, Ofwat released the first consultation based on the findings from the CFI. Ofwat decided to manage the consultation stage in two tranches, tranche 1 to cover straightforward and minor changes such as removing redundant sections and tranche 2 to cover more in-depth changes.
We found tranche 1 changes to be straightforward and agreed to them all. The only proposal that impacted customers was the removal of COVID-19 protections which were no longer needed.
Tranche 2 Consultation
The tranche 2 consultation was released in December 2023 with Ofwat proposing 25 changes (full list on p74 of consultation).
Some of the key proposed changes were:
- Extend the micro-business protections to businesses with 10 to 50 employees
- Include principles of good practice for Third Party Intermediaries (TPIs) and Retailers to only work with TPIs who operate in accordance with these principles
- Increased support for customers that have had a switch attempt blocked
- Increased protections for customers in vulnerable circumstances
- Greater transparency for customers on how to complain
- The collection of customer contact details for use in emergency and unplanned events
- Requirement of Retailers to issue two accurate bills per year based on actual meter reads
We had mixed views on the proposed changes which we submitted to Ofwat. There were some that we were supportive of, such as the TPI requirements and the support for customers with blocked switch attempts. Some changes seemed disproportionate to an issue or customer harm that hadn’t been evidenced, for example, holding 24/7 customer contact details for every customer is both impractical (ever-changing) and unnecessary because most business customers don’t require constant access to water. Other changes will not address the root cause of the issue they’re seeking to resolve. For example, the proposal to require Retailers to issue two accurate bills per year will not enable any better compliance with this. Retailers are already incentivised to read meters, the reasons why meters cannot be read include no accessibility, broken meters etc. These all need to be tackled, but penalising Retailers through a CPCoP requirement will not assist.
What happens next?
Ofwat is currently in the process of reviewing all consultation responses and is aiming to publish a further consultation on the proposed changes with legal text amendments within the first half of 2024, with the intention of the review being finalised later in the year.
