Ofwat has launched a new consultation on its proposals to amend the guaranteed standards scheme (GSS) to ensure all non-household customers continue to be protected when the competitive market opens for business in April 2017.

The Water Act 2014 will allow 1.2 million businesses and other non-household customers of providers based mainly or wholly in England to choose their supplier of water and wastewater retail services from April 2017.

Ofwat is currently considering a number of customer protection issues related to the new market which will be the largest retail water market in the world once it opens in 2017.

Ofwat says that the introduction of effective competition is expected to deliver many direct benefits to customers and provide them with the ultimate protection from poor customer service – the option to move to a different retailer. However, experience in other sectors shows that customers still need protection in certain situations .e.g. more aggressive or misleading sales and marketing techniques could both cause customers harm and damage the reputation of the whole sector.

According to the regulator, while customer protection measures are an essential part of a well-functioning market,  they should not stifle innovation or the development of effective competition. Ofwat does not want its proposals to create undue barriers to entry or expansion for new entrants.

As a priority, Ofwat is considering some particular areas of customer protection ahead of market opening, including the following.

• Possible extension of the existing Guaranteed Standards Scheme (GSS) so that non-household customers remain protected if they switch to a different retailer.
• Default contracts which could apply in certain situations where there is a supply to the customer but terms and conditions have not otherwise been agreed – known  as ‘deemed contracts’.
• Various sales, marketing and contractual issues – where Ofwat considers that a mandatory code of practice might be required for retailers, similar to the mis-selling code that was originally proposed in the Water Bill.

The regulator is also planning to consider issues relating to customer data, to ensure that customers’ rights over their data are clear.

Ofwat said it is prioritising the issues which are either related to:

• the delivery of the UK Government’s policy on retail exit – this includes GSS and deemed contracts; or
• where there is evidence that the issues have been a particular problem for customers in other sectors.

The consultation on the regulator’s  proposals on GSS will run for four weeks, with responses due by 2 October 2015.

Ofwat will publish its proposals on deemed contracts in early October 2015, alongside proposals about interim supply arrangements.

Following that, the proposals on marketing, sales and contractual issues will also be published for consultation.

Ofwat is separately also planning a number of stakeholder workshops during the next few months. The first of these will be a customer workshop in early September, followed by company workshops in the second half of September.

Click here to access the consultation on Ofwat’s proposals on GSS in ‘Customer protection in a retail market: Guaranteed Standards Scheme – a consultation’