Protecting customer credit in the event of a disorderly retail exit

The overall objectives of the project are, in the event a retailer makes a disorderly exit, to: - Gather options for protecting customers' monies; - Assess whether there is, or could be, a mechanism to provide recourse for retailers to recover the (reasonable) costs of honouring credit balances when taking over the supply of affected customers; - Recommend the most effective option(s) for protecting customers' monies and mitigating the exposure of the incoming retailer, including an assessment of any legal or regulatory changes that may need to be made to the existing framework, as appropriate. In order to achieve the overall objectives, the Customer requires that the following key tasks ("the Services") will be carried out by the Supplier: Key Task 1 - By reviewing what other regulators (including, but not limited to, the Water Industry Commission for Scotland, Ofgem, the FCA and the CAA) do to protect customers' money or provide recourse for retailers (or similar) to recover the (reasonable) costs of covering credit balances, and by reference to your experience of similar organisations, set out what mechanisms exist that are used to protect customer money. In doing so, highlight pros and cons across the different schemes. Key Task 2 - Set out the costs and risks associated with incoming retailers taking on credit balances of an outgoing retailer (Ofwat will provide background information). Key Task 3 - Evaluation and Options proposal - From your own knowledge, advise on any options to: a) Secure customers money, including but not limited to, instances where they have made pre-payments, deposits, etc. b) Introduce mechanisms for incoming retailers to be able to claim money back where they have taken on/ honoured credit balances from an outgoing retailer. We require Task 3 to involve stakeholder engagement, which may involve stakeholder workshops, so as to incorporate views from trading parties and customer groups. Key Deliverables The Supplier will provide the following as key Deliverables of the project: Deliverable 1 - Draft report will incorporate all key tasks 1, 2, and 3. The draft report will be subject to acceptance and sign off by the Associate Director, Market Outcomes and Enforcement (MOE), before moving on to the next stage. Deliverable 2 - Final report - to include any feedback received from Ofwat on Deliverable 1. The final report will be subject to acceptance and sign off by the Director, Business Retail, MOE. Timescales The Supplier will provide the key deliverables in accordance with the following timescales: Key Deliverables Date Deliverable 1 14 October 2019 Deliverable 2 25 November 2019 It is expected that the contract will commence on 29 August 2019 and the signing off of the Final Report by the Director, Business Retail, MOE (16 December 2019) shall be the contract Expiry Date. More details can be found in the Invitation to Tender (ITT).