Energylinx News

October 20, 2017

Ofgem wants energy suppliers to step in sooner to help customers manage debt

The energy regulator Ofgem has urged suppliers to help customers before they get themselves into unmanageable levels of debt.

New figures show customers struggling to pay their gas and electricity bills build up an average of £600 in debt before providers agree to set up a payment plan. Some energy suppliers let customers run up to £1000 debt before they intervene.

Ofgem wants energy suppliers to step in sooner to help customers manage debt. Under new rules, energy suppliers must make extra efforts to treat vulnerable customers fairly.

Rachel Fletcher, Ofgem's senior partner for Consumers and Competition:

"Paying off energy bills is a major concern for many customers in vulnerable situations"

"When suppliers let big debts accrue, it's a sign that they're not spotting debt or stepping in early enough to help customers who are struggling to pay bills.

"We want the industry to demonstrate that it is identifying and supporting these customers in a timely way. We will be monitoring suppliers to make sure they make long-term improvements on bringing down debt.

Ofgem says there has been some improvements from energy suppliers, as more customers with debts of less than £100 are managing to repay them.

Some suppliers also provide customers on prepayment meters with "friendly credit" to keep their gas and electricity running when they forget to top up.

However, Ofgem said the number of prepay customers repaying much larger bills was not decreasing fast enough. In particular, small and medium suppliers were not equipped to prevent debt build-up. Some of the debt is not the fault of the customer, such as inaccurate billing - where payments do not cover use - and problems with billing systems.

Ofgem said:

"All suppliers must be aware of their obligations, anticipate the challenges they may face from the start, and have adequate systems in place to support financially vulnerable customers"

Ofgem's report has found some improvements; it says the number of customers in debt to their supplier has fallen over the past year by 9% to 971,362 for gas customers, and by 3% to 1,195,635 for electricity customers.

The number of disconnections for debt also fell to 210, down from a peak of 8,300 a decade ago.

Why don't you compare energy suppliers and check whether you are paying more than you need to for your gas and electricity? Energylinx offer a free and impartial comparison and switching service either online or by calling 01259 220000.

Posted on October 20, 2017 at 09:56 AM