Energy regulator Ofgem has given the green light for collections on unpaid bills can resumer but has urged suppliers to avoid aggressive collection tactics.
Ofgem has told energy suppliers it is not in anyone’s interests for an open-ended debt collection delay.
In an open letter, the regulator set out it’s updated approach to regulating domestic and non-domestic supplier performance from 1st July 2020.
Energy companies had paused collections and have negotiated help for households struggling to pay, but Ofgem has said it is now ‘fair’ for civil enforcement officers to chase unpaid bills – within reason.
Households struggling with their finances during the coronavirus outbreak have been able to negotiate help on their regular bills, such as mortgages, credit card repayments, and energy bills.
In a letter to its suppliers, Chief Executive Jonathan Brearley said “We recognise that suppliers cannot extend unlimited credit to customers – nor is this in customers’ interests overall – and we anticipate suppliers will begin to restart debt management activities that may have been paused during the immediate crisis.”
“We will not tolerate sharp practice or aggressive debt collection and suppliers could face enforcement action where this is the case.”
The letter can be viewed here.
Commenting on Ofgem’s decision to allow energy companies to restart chasing some debts Peter Earl, Head of Energy at comparethemarket.com, said “Energy companies would be advised to display caution and flexibility when it comes to clawing back unpaid debts from those unable to pay their bill as a result of the pandemic’s economic fallout. Our research indicates that 16% of households are not confident they will be able to meet the demands of their household bills in the coming weeks, rising to 23% for families with children at home.”
“Britain’s suppliers deserve credit for responding swiftly in March to assure those struggling with the cost of their gas and electric that, in the event they are unable to pay, their supply of energy would not be cut off. Yet while lockdown restrictions are set to be relaxed early next month, the financial hardship faced by millions of struggling households is far from over.”