Ofgem reports that there’s more than £400 million in unclaimed funds held in closed accounts. £202m from domestic customers and £204m from non-domestic customers. These funds are held across 3.5 million households and more than 300k business accounts.
It’s vital that, as an energy company, you do all you can to return any unclaimed funds that you are holding to your customers. The benefits of doing this are far greater than moving towards the expectations of the regulator. It is the right thing to do – and relatively simple to activate too.
Let’s look at what this looks like…
What is the opportunity for you, and your customers?
The reason for these funds being unclaimed is varied. People move house, die or change suppliers, to name a few. This fund currently sits in your accounts for years, and in most cases, is never reunited with the person whose money it is.
Traditionally the main communication messages between an energy provider and the customer are around a bill, or arrears notice. Here, to reunite customers with their funds you can change the lines of communication. You can strengthen them. Imagine the response from a customer who receives a cheque as opposed to being sent a bill asking for one? In the modern economy where the customer is front and centre, trust and brand are essential. This transparency can help you regain trust which will have huge positive implications for your brand.
How do you reunite customers with the money owed to them?
It’s relatively straight forward for direct debit customers to be refunded. You can pay them back into the account the funds were originally debited from. If this isn’t a possibility, as there wasn’t a direct debit, there are other options that could be used to reunite your customers with their funds. For example, tracing your customers to their known address.
Monitoring the home move process can also help you proactively monitor movements of your customers giving you accurate details to contact them with. The benefits of doing this are far greater than this single task – it can offer the power to retain them when they do move by being proactive in your communications or minimise any potential losses from not paying their account on departure, through knowing where they have moved to.
Be transparent and build trust and loyalty in your brand
Many people don’t know you have their money. If they did, your lines of communication would likely be somewhat busier as they attempt to get their money back.
While there is some work to be done to retrospectively look at what funds you have and who they are owed to, moving forwards there are simple actions that can be done to ensure this doesn’t reoccur. This could be as simple as being more transparent and clear with the account closing process. So, both you and your customer know what is expected when they leave and when, and how, they will receive any credit after the account is closed.
It is important that you try every method available to be able to give the money back to your customers that are owed it. Should this not be possible, and you have tried all you can, then the energy regulator Ofgem suggests that you should use these unclaimed funds to benefit wider society in different ways – being open and transparent about how this is done. For example, investing funds into community projects and so on, and ensuring you are clear in communicating this.
The broader switching landscape will make customers much savvier to their rights
Brand loyalty is an essential factor, especially in the energy market that’s typically a high switching environment with little loyalty. When you look at other markets, such as Banking, for example, it is now moving into the ‘switching’ landscape this year with the advent of Open Banking. This will only make switching more commonplace than today.
People are already starting to question many things. From how their data is used or secured across to how much value they are getting – whether that be price, or broader value to them personally. This is a good thing. As we transition through this consent driven way of life, it is essential that there are much clearer, much easier ways for the customer to understand.
With consent being a huge player for engaging with customers (an outcome from the General Data Protection Regulation [GDPR]), you need to be able to communicate with your customers to enable better, broader and more valuable relationships. The secret behind this will be trust; and trust is built on transparency. The overarching task that’s required is building a value exchange that’s lasting. This reuniting of funds is one step towards achieving that.
Speak to us about how we can help you reunite your customers with their funds. With so much change afoot, simple changes can be hugely rewarding for you – and more importantly your customers.