Utility Warehouse ordered to pay £1.5m after failing to support customers in debt

Energy giant Utility Warehouse has been ordered to pay £1.5 million in redress to its customers an investigation by Ofgem found it failed to adequately support those who were struggling in debt.

The investigation by the energy regulator found that customers were not consistently offered support, such as debt repayment plans and energy efficiency advice, which left some of its customers disadvantaged, regulator.

Ofgem was made aware of the failings following an audit report in 2018. A formal investigation was then opened which found that Utility Warehouse’s failings took place between 2013 and 2019.

The supplier was found to be not consistently offering to put domestic customers struggling to pay their energy bills on debt repayment plans. This move did not allow payments to be taken direct from customers’ benefits or to take into account customers’ ability to pay when calculating regular instalments as required.

Customers were not consistently offered the option of paying back charges via the voluntary installation of a pre-payment meter or offered energy efficiency advice on how to reduce their bills. In some cases, this led to the unnecessary installation of pre-payment meters under warrant.

During the course of the investigation, Utility Warehouse also raised the fact that it submitted some inaccurate Social Obligation Reporting (SOR) data to Ofgem between 2013-2019. This data allows Ofgem to review suppliers’ performance regarding their social obligations and compliance with licence requirements, challenge poor performance and inform policy decisions.

Ofgem has decided to close the investigation through alternative action after considering that Utility Warehouse has accepted its failings and put in place measures to prevent this from happening again. It has offered to pay £1.5 million into the voluntary redress fund, which supports vulnerable customers and innovation within the energy sector.

Cathryn Scott, Director of Enforcement and Emerging Issues at Ofgem, said “Energy suppliers are required to look after their customers, especially those in vulnerable situations. Between 2013-2019, Utility Warehouse failed to take the necessary steps to treat some customers in payment difficulty fairly, depriving them of the opportunity to manage their energy debt and ongoing energy costs.”

“While the unprecedented and unexpected rise in gas and electricity prices over recent months has put energy markets under severe strain, we expect suppliers to continue to comply with their licence obligations and treat people fairly, including by providing support to vulnerable consumers. Where we see poor behaviour, Ofgem will be ready to step in and take swift action.”