Water sector regulator Ofwat has launched a new consultation on its proposed principles for any voluntary codes of practice for Third Party Intermediaries for the business retail market, such as brokers or price comparison websites.
This is in addition to the protections set out in the Customer Protection Code of Practice.
From April this year, eligible businesses, charity and public sector organisations in England will be able to choose who they pay for their water and wastewater retail services.
Third Party Intermediaries (TPIs) can offer services to customers including advice and assistance with a range of functions, such as procurement, efficiency and management of services, but they are not regulated by Ofwat.
The consultation paper states:
“Third party intermediaries (TPIs) are common in markets that have similar structures to the business retail market, including the energy market and the financial services market. In the energy market, TPIs are organisations or individuals that give energy related advice, aimed at helping customers buy energy and/or manage their energy needs. Third party intermediaries include switching sites, energy brokers and any company that offers support with energy procurement. We expect to see similar services being offered by TPIs in the business retail market…..For example, there is potential for a triple utility offering should a current energy TPI choose to enter the water sector. Product bundling may become a new business model within the business retail market.”
“Possible that business customers will not necessarily know whether they are being supplied by a TPI or a licensed retailer"
Introducing the consultation paper, Ofwat said that given the overlap between the services offered by TPIs and those offered by licensed retailers, as well as the business models operated by some TPIs, the regulator believes “it is possible that business customers will not necessarily know whether they are being supplied by a TPI or a licensed retailer. Our view is that business customers should have the same level of protection whoever supplies them.”
Ofwat senior director Richard Khaldi commented:
“The use of Third Party Intermediaries is a key opportunity for customers to engage through a forum they already use for other services and to potentially benefit from multi-utility offerings. While many TPIs offer valuable services to business customers and will play an important part in the new water market, there have been concerns about the way some TPIs have operated in other markets, such as energy.”
“We want there to be some form of protection in place for customers to minimise the chances of them being missold and ensure people have access to complete and accurate information.”
“TPIs in other sectors are subject to voluntary and self-regulatory measures, such as codes of practice. We want similar protection in place for the water market.”
Deadline to submit responses is 7th March 2017 – click here to download the consultation paper Protecting customers in the business market – a consultation on draft principles for voluntary TPI codes of conduct
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