Energy supplier Iresa banned from taking on new customers

Ofgem has banned energy supplier Iresa from taking on new customers until it resolves a series of customer service problems.

The small independent supplier is also banned from increasing existing customers' direct debits and asking them for one-off-payments for up to three months, the regulator said.

Ofgem has ordered it to extend its call centre hours, respond to customer emails within five working days, clear a backlog of emails, log all customer problems and offer to put all of its vulnerable customers on the priority services register.

The regulator warned a failure to sort out the problems within the next three months could see it taking further action, including revoking Iresa's licence.

The move comes amid a separate longer-term investigation into the company.

Ofgem chief executive Dermot Nolan said: "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.

"Iresa now needs to act quickly and put its house in order otherwise, ultimately, its licence could be revoked."

Citizens Advice chief executive Gillian Guy said: "Ofgem has made a very important intervention by confirming a provisional order on Iresa. We welcome this effort to prevent further problems for the supplier's customers.

"As the watchdog for energy consumers, Citizens Advice formally referred Iresa to Ofgem last November for its consistently poor customer service. Iresa must now take steps to drastically improve its customer service and fix the problems experienced by its customers.

"While this is a positive step, Ofgem also needs to go further. The regulator should tighten up its licensing regime so they can prevent poorly prepared suppliers from entering the market in the first place."

Alex Neill, Which? managing director of home services, said: "Iresa has form for appalling customer service, this is the second time in a year the regulator has stopped them from gaining new customers and ordered improvements.

"The company now must ensure it changes for the long-term, otherwise the regulator will need to go further to protect consumers."