- Ofgem the Government Energy Regulator
STOP ENERGY SUPPLIERS FORCING VULNERABLE CUSTOMERS INTO DEBT
UK consumers are half a billion pounds in debt to energy suppliers. Four million households are living with energy debt, many of whom are vulnerable due to age, disability, illness or other circumstances. Inaccurate billing is a primary cause of energy debt in vulnerable households. We want energy suppliers to start following the rules and stop forcing vulnerable households into debt. We’re calling on Ofgem to use their existing powers to make this happen.
The story set out below is just one of many we hear where energy suppliers are failing to provide an adequate service to vulnerable people. We have witnessed how these situations are causing unnecessary fear and frustration, are driving vulnerable people into debt, or causing them to go without energy in order to avoid debt.
53 year old Rosie, a disabled woman from Plymouth had a pre-payment meter installed to recover a £3,000 debt she was convinced was incorrect. The pre-payment electricity tariff is more expensive, and coupled with the debt recovery the new meter cost Rosie a lot more than she had been paying, and more than she could afford. Rosie, who had previously been on top of her finances, started borrowing money to avoid being cut off.
Rosie is agoraphobic and had to rely on relatives to top up the pre-payment meter for her – a situation she resented because it felt like a loss of independence. She tried numerous times to get in touch with her supplier. The operatives she spoke to never had any record of her previous calls and did not take her concerns seriously. She was not offered help, and when an engineer did attend, on the insistence of a family member, he was rude and left Rosie feeling intimidated.
It took three years and an intervention from Plymouth Energy Community, a local community organisation before Rosie’s supplier finally backed down, admitted that the debt had built up as the result of a fault, and replaced the meter. By this time Rosie was at her wits end with worry. It is not fair that she had to experience this just because her supplier could not get her bill right.
SIGN OUR PETITION:
We call on Ofgem the Government energy regulator to ensure that energy suppliers follow the rules and:
- Identify vulnerable customers: Proactively ensure vulnerable customers are identified and receive the extra assistance they are entitled to, such as priority services or debt advice.
- Provide accurate billing: Suppliers must arrange meter readings and send regular, accurate bills. Estimates should be avoided, but if they are to be used estimates should be based on a customer’s previous usage. Billing mistakes must be rectified within fourteen days.
- Conduct fair sales: Help customers establish payment plans according to their needs. Never sell tariffs based on direct debit levels which are too low for the customer’s usage. Never ask a new tenant to pay the bill for a previous resident.
- Use pre-payment meters appropriately:
Never install a pre-payment meter to recover arrears unless alternative repayment options have been explored. Never break into the home of a vulnerable person to install a pre-payment meter. Always establish that the customer will be able to access and operate new meters safely.
An industry-wide problem
Plymouth Energy Community has reports of poor service to vulnerable customers by all of the six largest energy suppliers, and some of the smaller ones too. We think Ofgem, the energy regulator, should investigate the treatment of vulnerable customers and put new protections in place to ensure a fair service. This should go beyond looking at complaint handling and focus on ensuring that Ofgem’s Vulnerability Strategy is being adhered to. Sanctions should be applied where rules are not being followed.
The Competition and Markets Authority 2016 Energy Market Investigation highlights ‘considerable concerns’ about the quality of service offered by the six largest suppliers. They found complaints increased fivefold between 2008 and 2013. Plymouth Energy Community encounter customers who feel they have been ‘complaining’ for months, however investigation shows that a formal complaint has not in fact been logged. It is therefore suggested that complaint levels may be an underrepresentation of the actual numbers of customers who wish to complain.
What the law says
Ofgem’s Consumer Vulnerability Strategy (2013) sets out an expectation for suppliers to ‘think broadly about the potential for their business to create risk factors that may cause or exacerbate vulnerability’ and that suppliers should appropriately deal with vulnerability throughout the customer life-cycle, stressing that ‘every contact counts and is important’ (4.15, 4.16 and 4.17).
Condition 21B of the Standard Conditions of Electricity Supply Licence of the Gas and Electricity Markets Authority (October 2015) sets out the supplier’s responsibility to provide accurate bills on receipt of meter readings. Energy UK represents and audits five of the Big Six energy suppliers and has a Code of Practice for Accurate Billing. It states that suppliers ‘will make sure that they check unusually high or low bills before they send them out’ (3.6).
Condition 28.1 of the Standard Conditions of Electricity Supply Licence of the Gas and Electricity Markets Authority (Condition 27.1 iii) refers to the installation of pre-payment meters as only acceptable where it is ‘safe and reasonably practicable in all the circumstances of the case for the Domestic Customer to do so’. Furthermore, Condition 28.1A sets out the suppliers responsibility to move or replace the pre-payment meter where the customer is not able to operate it safely.
The Equality Act (2010) also sets out the Duty to make reasonable adjustments in order to remove barriers for disabled people.
- Ofgem the Government Energy Regulator
STOP ENERGY SUPPLIERS FROM FORCING VULNERABLE CUSTOMERS INTO DEBT
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