Energy customers face bailiffs as Ofgem allows debt collecting again
Gas and electricity customers face the prospect of debt collectors chasing up unpaid bills after the energy industry regulator told suppliers they no longer had to offer unlimited coronavirus payment holidays.
Ofgem gave the go-ahead to restart debt collections weeks after calling on energy suppliers to offer help to customers facing financial pain due to the Covid-19 pandemic by delaying or reducing bills.
Bailiffs were also barred from chasing households struggling to pay council tax or parking fines, but these rules will remain in place for at least another two months.
Jonathan Brearley, Ofgem’s chief executive, said that from July energy suppliers would be allowed to restart debt collections because it was not “in customers’ interests” for energy companies to “extend unlimited credit to customers”.
In a letter to energy suppliers last week he warned energy suppliers and their debt collection agencies against “sharp practice or aggressive debt collection”, and urged the companies to “give careful consideration to the customer’s circumstances and ability to pay”.
Under the energy industry’s original agreement with the government, suppliers were expected to identify customers who might be in financial distress and offer to reassess, reduce or pause bill payments to help “reassure” homes during the coronavirus lockdown.
The Guardian revealed that despite the industry’s promise to help support customers, many of the UK’s largest energy suppliers continued to use debt collectors after signing up to the government’s agreement.
One letter sent by a debt collector on behalf of Shell Energy in late April, and seen by the Guardian, warned that arrangements would be made for a doorstep collector to visit the home address of the customer in order to chase an outstanding balance of £78.51.
British Gas, Ovo Energy and E.ON UK all confirmed they had continued to use third-party debt collection agencies too.
Natalie Hitchins from the consumer group Which? said at the time that it was concerning to hear that any energy supplier was using debt collectors to “place pressure on customers who could be struggling during this difficult time”.
“This latest update from the regulator should not be an excuse for suppliers to start hounding customers who may not be able to afford repayments yet. We expect energy suppliers to adopt a flexible approach and work with customers to agree on a repayment plan they can afford,” she said.
The regulator’s decision to relax the rules faced by energy suppliers comes despite warnings that millions of people paid through the government’s furlough scheme could be made redundant in the next two months when the scheme comes to an end later this year.
Ofgem told suppliers to “consider how their approach to debt management should evolve” as they continue to “deal with customers financially impacted by the Covid-19 crisis”.
Source: Read Full Article