The Arvato/British Gas scandal highlights the difference between accountability and responsibility

The British energy market regulator Ofgem, regularly publishes customer satisfaction data covering the entire energy market in the UK. The data is shocking, considering that British consumers can choose their energy supplier – this choice is supposed to create an open market where companies strive to retain their customers. The reality is that only 64% of customers are satisfied with their energy supplier. Only 61% said it is easy to compare suppliers – which is the point.

Dozens of British energy companies have gone bust since the pandemic. At the last Public Accounts Committee parliamentary discussion on the topic, there were 29 failed energy suppliers since 2021.

The founder of MoneySavingExpert, Martyn Lewis, said that if your energy company does go bust then the last company you ever want to move to is British Gas. He said: “Missing credit balances, billing delays and poor communication would be bad enough in isolation – but in the midst of the explosion in consumer energy prices, we mustn’t underestimate the impact of these errors on people’s financial and emotional wellbeing, many of whom are already feeling scared and vulnerable.”

So imagine if you are a British Gas customer and you get behind on your bills. The energy companies are legally obliged to help customers in difficulty – they can’t just switch off the power without offering more affordable payment plans or switching the customer to a prepayment meter, to let the customer pay for energy as it is used.

But any changes to bills or metering must be in negotiation with the customer. The Ofgem advice states: ”A supplier can force-fit a prepayment meter by warrant only after they have taken all reasonable steps to agree payment with you. It should be a last resort to avoid disconnecting your supply.”

So, if a customer is not paying their bill and has not agreed on any form of repayment plan or agreed to a prepayment meter then the energy company can forcibly install a prepayment meter – so the customer has to start paying for energy as they use it by topping up the credit on the meter.

British Gas has recently hit the headlines because their meter installation teams have been physically breaking into homes to install prepayment meters. This has even taken place where it was clear that vulnerable people lived in the property, such as young children, elderly, or disabled individuals.

British Gas immediately pointed to their supplier Arvato Financial Solutions – the partner responsible for the collections process and installation of prepayment meters. It also soon became clear that the teams at Arvato were earning a bonus for every prepayment meter installed. If an Arvato team member is presented with a situation where it makes sense to ask more questions and explore more negotiation over the unpaid bills then they are unlikely to follow this path as their bonus depends on getting more prepayment meters installed.

This is a classic case of passing responsibility to a supplier – the task of processing collections and taking action as needed – without acknowledging that the accountability for the welfare of the customer remains with British Gas. They hired Arvato to undertake the meter installation. They must have agreed to the bonus payment for every meter installed. They defined how their collections supplier must behave with their customers.

It’s hard to believe that Arvato has gone rogue when a thorough outsourcing process must have taken place, including agreement on targets and deliverables. British Gas needs to take ownership of the problem and work with Ofgem to ensure that energy companies can chase the money they are owed, but in a way that does not endanger vulnerable customers.

Responsibility is not accountability. This is true in all outsourcing agreements. Your accountability to the customer always sits with your brand and brand values, no matter which supplier is managing your business processes.

When things go wrong, don’t point to your supplier and blame them. Own the problem and resolve it with your supplier in partnership. Your customer doesn’t care about your internal supply chain. The customers of British Gas had probably never heard of Arvato until this recent scandal – to them it was British Gas installing a new meter.

It’s exactly the same in any customer service situation. When a mistake is made a retailer cannot say ‘it was the company that manages our contact centre – not us.’ Nobody cares. When a customer calls or messages a contact centre they are contacting your brand – not a supplier. You are accountable for developing and maintaining that relationship.

Let me know what you think about responsibility and accountability in sourcing contracts. Leave a comment here on the article or get in touch via my LinkedIn.

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