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Energy firms told to support customers in debt


Some energy companies are allowing households to build up arrears of more than £800 on their bills before intervening, according to Ofgem.

The regulator is urging suppliers to step in before customers find themselves with unmanageable levels of debt.
Figures for the past year showed some companies were allowing unpaid bills to accrue before stepping in to put indebted customers on a repayment plan.
Consumers now owe an average of £628 before they start paying back debt on their electricity accounts – a 7% increase on last year.
For gas accounts, the figure was £622 – 5% higher than 12 months ago.
Ofgem said some companies, including “big six” supplier npower, were performing “significantly worse than the industry average” by letting customers build up debts of more than £800 on electricity and gas bills.
It called on the companies to “reflect and act quickly”.

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Ofgem said npower, Utility Warehouse, Ecotricity, iSupplyEnergy and First Utility allowed customers to build up an average of more than £800 in electricity debt before they start paying it off.
It also said npower, Utility Warehouse and Spark Energy allowed similar levels of debt on gas bills.
Rachel Fletcher, Ofgem’s senior partner for consumers and competition, said: “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 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.”
Npower said: “npower is committed to helping its most vulnerable customers and we go above and beyond our regulatory obligations to provide assistance to those who need it most.”
It said Ofgem’s report also pointed to good practice by the company.
“We will continue to work hard to ensure we’re stepping in early enough to get these customers onto an appropriate debt repayment plan,” the supplier added.

Image: npower is among the suppliers performing ‘significantly worse than the industry average’
Under new Ofgem rules, suppliers must identify vulnerable customers and show they have taken additional action to treat them fairly.
The regulator’s latest figures came in its annual report on how suppliers treat such customers, including those in debt and at risk of being disconnected.
It found that, in some respects, suppliers were doing more to help – with more free gas safety tests and help in managing day-to-day energy use.
Meanwhile, the number of disconnections because of debt fell to just 210 after reaching a peak of 8,300 a decade ago.
Ofgem said the number of gas customers in debt has fallen by 9% to just over 970,000, while for electricity customers there was a fall of 3% to 1.2 million.
It comes as the Government plans a cap on energy tariffs to protect households from rip-off bills.

Source: SKY