Wednesday, May 4, 2022

Ofgem to decide whether Octopus or admins will pay customers awaiting Avro refund

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Some consumers who were in the midst of switching to Avro when it went bust have already waited over half a year for credit to be restored, but Octopus said it will offer full refunds despite the investigation

Ofgem is currently investigating accounts like this to decide whether Octopus should allow consumers to repay their loans or whether it should fall to Avro’s administrators.

Consumers who were in the midst of switching to Avro when it went into administration may find they have to wait even longer for their loan.

It comes at a time when hundreds of ex-Avro customers are still waiting for their credit to be restored.

More than half a million consumers have been moved to Octopus Energy as part of Ofgem’s Supplier of Last Resort process after Avro collapsed as one of the first – and largest – suppliers in September 2021.

More than half of the suppliers in the market have gone bust since August of last year after skyrocketing wholesale costs.

While many have been rescheduled and received their credit as part of the Supplier of Last Resort process, many former Avro customers have complained about the long wait for their credit to be refunded.

Octopus previously said the vast majority of consumers had their balance restored, but there were about 2 percent who have more complex data or billing issues.

Over time, customers are becoming more frustrated with the lack of exercise, especially as the cost of living continues to rise.

However, Octopus has confirmed that it would indeed offer full refunds to these customers, despite Ofgem’s investigation.

A spokesman for Octopus said: “This Ofgem investigation relates to around 2,000 people who were in the process of switching to Avro before they went bust, who had already made an upfront payment to Avro but had never actually been supplied with them.

“The process of obtaining information on these ‘flight customers’ has not been easy – we have had to go through many of these cases manually and acknowledge and reimburse all of them, although we will likely not be able to recover this money from the SOLR process .

“This refund process should be complete by the end of this week.

“We have actively sought advice from Ofgem on how to treat these balances as part of our SOLR commitments. In the meantime, we have considered these refunds on a case-by-case basis.

“The formal guidance from Ofgem was returned to us on 28 April and whilst it is still not certain whether these credits can be reclaimed under the terms of the licence, Octopus Energy has made the decision to honor them all.

“If anyone hasn’t received their refund by next week and feels they are owed money and have not been refunded, they should contact us at hello@octopus.energy.”

Ofgem said if a consumer had funds with Avro at the time of the Supply of Last Resort process, then their funds are protected and they should speak to Octopus in the first instance to recover those funds.

Those whose energy suppliers have stopped trading are automatically moved to a new supplier as part of the ‘Supplier of Last Resort’ process.

Last resort suppliers work with administrators to determine the final balances of customers from failed suppliers and these are shared with customers.

This process also ensures that all funds are protected.

However, there are a number of factors that depend on how quickly this can happen.

This includes the quality of data stored by the failed supplier, the number of customers migrated as part of a last resort appointment, the arrangements made between a supplier and the administrator for the failed deployment, and any third-party services suppliers to the failed supplier.

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