30/06/2020

Energy firms may start chasing unpaid bills again from July

Although it has warned against aggressive debt collection, the energy regulator, Ofgem, has stated that energy firms can start collecting unpaid bills that were put on hold at the start of the crisis.

Ofgem chief executive Jonathan Brearley said in a letter to energy firms that suppliers “cannot extend unlimited credit to customers” and were anticipated to restart debt management activities.

The letter sets out the makes it clear that firms should continue to respect a voluntary agreement with the government to support vulnerable customers during the Coronavirus pandemic. This will mean firms shouldn’t suspend credit meters if customers are unable to pay and may reduce or pause bill or debt payments for those who need it.

The letter has 2 main points that detail how Ofgem expects companies to help customers and take into account the current circumstances surrounding the Coronavirus pandemic. The main points from the letter are;

Ofgem “will not tolerate sharp practice or aggressive debt collection”

The letter makes it clear to suppliers that they will not tolerate any debt collection practices that are considered aggressive whilst a supplier’s customers are still dealing with the financial effects of the Coronavirus. The letter goes on to state that “We expect suppliers (and any third parties contracted by them) to ensure that any debt management processes are fair and give careful consideration to the customer's circumstances and ability to pay, and suppliers could face enforcement action where this is not the case” and ask suppliers to “consider how their approach to debt management should evolve going forward as they continue to deal with customers finally impacted by the Coronavirus crisis.”

Ofgem expects suppliers to continue upholding voluntary agreements with the government.

Ofgem has detailed within its letter how it expects suppliers to “continue to uphold the voluntary agreement with the Department for Business, Energy and Industrial Strategy” which sets out principles that energy suppliers should use to support customers affected by Coronavirus. The letter details how Ofgem also recognises that suppliers “cannot extend unlimited credit to customers” and agrees that it wouldn’t be in the customer’s best interests to do so. They also anticipate “suppliers will begin to restart debt management activities that may have been paused during the immediate crisis.”

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