Energy customers will automatically receive £30 if they experience delays or mistakes when switching supplier.
Regulator Ofgem said its new compensation requirements for gas and electricity customers will protect consumers and further boost confidence in the switching process.
Customers will receive an automatic £30 payment from suppliers if they are switched by mistake, if their switch takes longer than 15 working days, or if their final bill does not arrive within six weeks.
The requirements coming into force from May 1 will give customers further peace of mind that they will be compensated if something goes wrong when they switch, Ofgem said.
It said the moves should also serve as a “wake-up call” for suppliers to cut out problems for customers and get switching right first time.
From May 1, customers whose switch does not complete within 15 working days, or who are switched by a supplier by mistake, will receive the payment from the new supplier.
The supplier the customer is switching away from must pay out if it fails to issue a final bill within six weeks of a switch.
The new guaranteed standards are part of Ofgem’s work to deliver faster and more reliable switching.
In 2019 Ofgem introduced a first wave of guaranteed standards, meaning suppliers must pay out if they fail to meet minimum standards around spotting and correcting mistaken switches, or refunding credit balances to customers.
Since then, customers have already received more than £700,000 from suppliers. Of these payments, 27% have been for mistaken switches, while 73% have been for late credit balance refunds.
Mary Starks, executive director for consumers and markets at Ofgem, said: “More customers are switching than ever, with a record 6.4 million changing supplier in 2019. But we also know that a minority can still experience problems when they switch.
“As part of our commitment to protecting consumers and enabling competition, we are introducing these new standards to give customers further peace of mind, and to challenge suppliers to get it right first time.
“Going forward, we will continue working with suppliers and consumer groups to deliver our programme for faster and more reliable switching and ensure these arrangements are fit for the future.”
Minister for Energy and Clean Growth Kwasi Kwarteng said: “We’ve made it easier than ever for consumers to shop around and record numbers are now switching suppliers to save on their bills.
“These tough new standards will ensure switching is as smooth as possible and consumers are always protected.”
David Pilling, head of policy and public affairs at the Energy Ombudsman, said: “Switching is now second only to billing as a source of complaints that we handle, so it’s clear that for too many people the process of changing supplier doesn’t go as smoothly as it should.
“The introduction of automatic compensation is a welcome intervention by the regulator. It offers consumers access to immediate redress and gives suppliers a financial incentive to get switches right first time.
“At the same time we think it’s vital that, as well as paying compensation, energy suppliers look at what went wrong with the switch and make improvements to their processes. It’s in this root-cause analysis and pro-active work to raise standards across the sector that we see our role as the ombudsman.
“Anyone with an unresolved energy switching complaint – including about the payment of automatic compensation – can escalate the matter to us and we’ll investigate for free.”