Ofcom names and shames utilities giants for treatment of indebted customers

Ofcom names and shames utilities giants for treatment of indebted customers

Ofgem has called upon suppliers to do more to help customers manage their debt, as a new report shows some customers accrue £800 of debt in unpaid bills before repayments start.

The utilities regulator published its Vulnerable consumers in the retail energy market: 2017 report on October 16. It looked at how suppliers treat their customers in vulnerable situations, including those in debt and at risk of being disconnected.

Ofgem found some suppliers are letting a high number of customers build up more than £800 debt before stepping in, and helping them start paying it back by putting them on a manageable debt repayment plan.

These companies include npower, First Utility, Utility Warehouse, Ecotricity, iSupplyEnergy, and Spark Energy. The regulator said they performed significantly worse than the industry average and Ofgem is calling on them to reflect and act quickly.

However, the report found the number of customers in debt to their supplier had fallen over the last year – by nine percent for gas customers and three percent for electricity customers.

The report also found that in some respects, suppliers are doing more to help such customers. Ofgem said suppliers now offer customers a near-record number of free ‘priority services’ such as gas safety tests and meter readings, to help them manage their energy day to day.

The number of disconnections for debt also fell last year, to 210. The regulator said this is part of a long-term fall, from a peak of 8,300 disconnections a decade ago.

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 the 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.”