Customers face paying over the odds for their energy if they fail credit checks, Consumer Focus has warned. The independent body is worried that essential services, such as gas and electricity, may be lumped in with other forms of financial credit as more checks are being carried out on customers by power companies.
More energy firms are using credit reference agencies to make sure they get their money. Consumer Focus is concerned that energy firms could potentially use such information to prevent those most in need of the best deals from getting the cheapest energy, even if they’ve always paid their bills on time.
Dhara Vyas, energy expert at Consumer Focus, said: “Used responsibly credit checks could help stop energy customers going into debt and most people will feel no ill-effects from greater information sharing. But without the right checks and balances those with a poor financial credit history could be unfairly penalised, particularly the poorest whose budgets are most stretched.
“Energy is an essential service that we all need for our health and wellbeing. It must not be treated the same way as other types of credit, like loans and credit cards. The right protections and processes must be put in place by energy firms to address these risks.”
Consumer Focus wants a new approach to credit rating, so consumers are less likely to be penalised and more likely to be helped avoid getting into debt.