Energy suppliers too slow at helping rising number of indebted customers – Ofgem
Energy suppliers are still too slow at helping rising numbers of customers deal with debt, Ofgem has said.
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, the regulator’s annual report on vulnerable customers shows.
The number of indebted customers on repayment plans rose slightly last year – 1% for electricity and 0.4% for gas – but 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 customers) and 10% for gas (505,000 customers).
Suppliers are bound by Ofgem’s rules to help their customers manage debt, including by putting them on an affordable repayment plan.
The figures suggested that suppliers were not moving quickly or efficiently enough to put customers who owed money on repayment plans, potentially pushing them further into debt or hardship, according to the report.
However it found that suppliers are getting better at helping vulnerable customers manage their energy day to day.
More than 850,000 electricity customers and 650,000 gas customers received free services through suppliers’ priority service registers – an 8.5% and 4.4% increase respectively – 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 also fell to a record low last year, with just six electricity disconnections and no gas disconnections.
The number of prepayment meters installed forcibly by suppliers under warrant to collect a debt fell by 15% to 71,000.
Ofgem said it remained concerned about a high number of forcible meter installations carried out by First Utility, now Shell Energy, and Utility Warehouse.
First Utility did not carry out any forcible installations in the last quarter of last year, and Shell has pledged to improve performance.
At the same time, however, 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, to a total of 70,000 last year.
Mary Starks, executive director for consumers and markets at Ofgem, said: “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.”