Ofgem, the energy regulator, has published its latest annual report on how suppliers treat their customers in vulnerable situations, including those in debt and at risk of being disconnected.
In its report Ofgem state that energy suppliers are “getting better” at helping vulnerable customers to manage their energy day to day. However, they say they are still too slow in helping rising numbers of customers deal with debt.
Ofcom data reveals that:
in 2018 over 850,000 and 650,000 free services were provided by suppliers respectively to vulnerable electricity and gas customers through their priority service registers — an 8.5% increase for electricity and 4.4% for gas services from the previous year
customers benefitted from additional support to help them manage their energy day to day, for example through braille or large print bills for visually impaired people
the number of disconnections for debt fell to a record low in 2018, with just 6 electricity disconnections and no gas disconnections
the number of prepayment meters installed forcibly by suppliers under warrant to collect a debt fell by 15 percent to 71,000 after Ofgem introduced new rules to encourage suppliers to cut down on this practice
at the same time there was more than a threefold rise in the number of smart meters switched remotely by suppliers from credit to prepayment mode to repay a debt.
Ofgem explain that suppliers are bound by its rules to only install prepayment meters to collect debt where they have checked that it is appropriate for customers to pay by this method. Installing meters by force, they say, must be a last resort.
Ofgem also state that they are concerned that some suppliers may be remotely switching smart meters to prepayment mode to collect debt inappropriately and without the customer’s active choice. The regulator states that it expects all suppliers to use the remote switching facility fairly and appropriately and announce that they intend to monitor industry performance closely in this area in future.
Regarding debt, the Ofgem report states that last year saw the overall number of customers in debt rise by 4.2 % to 1.31 million for electricity, and 4.8 % to 1.05 million for gas customers.
Ofgem state that suppliers are bound to help their customers manage debt, including by putting them on an affordable repayment plan. However, numbers of indebted customers on repayment plans in 2018 was far outweighed by the increase in the number of those who owed money but were not put on any plan — a rise of around 8% for electricity (648,000) and 10% for gas (505,000) customers.
The regulator is proposing to strengthen its rules in future by making it a licence condition that suppliers contact indebted customers and check their understanding and ability to pay before setting up a debt repayment plan.
The full report, Vulnerable Consumers in the Energy Market: 2019 is here.
Last reviewed 8 October 2019