Energy suppliers ‘too slow at helping customers in debt’

Energy regulator Ofgem says although the number of disconnections for debt fell to record lows last year, not enough customers are being helped onto repayment plans

Big Zero Report 2022

Energy suppliers are acting too slowly to help rising numbers of customers deal with debt.

That’s the verdict from energy regulator Ofgem, which has published its yearly report on how vulnerable customers are treated by their gas and power suppliers.

It highlights a number of positives – more than 850,000 and 650,000 free services were provided to vulnerable electricity and gas customers respectively in 2018 through priority service registers, marking an 8.5% increase for electricity and a 4.4% rise for gas services from the previous year.

The number of debt-based disconnections also fell to a record low, with just six electricity disconnections and no gas disconnections taking place, while the number of prepayment meters installed under warrant to collect a debt fell by 15% to 71,000 in 2018.

However, despite these successes, Ofgem states the the number of smart meters that were switched remotely from credit to prepayment mode in order to repay debts more than tripled, rising from 21,000 in 2017 to 70,000 in 2018.

Suppliers are only allowed install prepayment meters to collect debt if they have already checked this is an appropriate method through which the customer can pay – Ofgem believes some suppliers may now be remotely switching smart meters to prepayment mode to circumvent this requirement and promises to monitor this area closely in the future.

The report also suggests suppliers are not moving quickly enough to put in-debt customers on repayment plans, as although the overall number of customers who owe money rose by 4.2% for electricity and 4.8% for gas customers, the numbers of indebted customers on repayment plans only increased by 1% and 0.4% respectively.

Mary Starks, Executive Director for Consumers and Markets at Ofgem said: “Energy is an essential service, and suppliers must take particular care with those customers who are less able to manage and pay for their energy.

“We are pleased that suppliers are making such good progress on getting extra help to vulnerable customers that need it, for example by making their bills easier to access or read.

“However, some suppliers are simply not keeping up with the rising numbers of customers who owe them money. It’s imperative that suppliers move quickly and efficiently to help struggling customers manage paying back their debts or risk pushing them further into hardship.”

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