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Energy customers could face bailiffs from 1 July

Emma Lunn
Written By:
Emma Lunn

Ofgem is allowing energy firms to re-start chasing debts and unpaid bills from next month.

Households struggling to pay for gas and electricity could soon receive visits from bailiffs and debt collectors after Ofgem ended the hiatus on energy firms chasing debts.

The regulator wrote to energy suppliers last week, informing them they no longer had to offer unlimited coronavirus payment holidays.

The Government announced plans in March to help people struggling to pay their gas and electricity bills because of the coronavirus outbreak.

As part of the measures, energy firms agreed to reassess, reduce or pause debt and bill payments, and promised not to disconnect any household.

But Ofgem has now given suppliers the go-ahead to restart debt collections from next week.

Jonathan Brearley, Ofgem’s chief executive, published a letter he had written to energy firms last week about regulatory expectations from 1 July.

It 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 expect suppliers (and any third parties contracted by them) to ensure that any debt management processes are fair and give careful consideration to the customer’s circumstances and ability to pay – we will not tolerate sharp practice or aggressive debt collection and suppliers could face enforcement action where this is the case.”

Research by Compare the Market found 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.

Peter Earl, head of energy at Compare the Market, says: “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.

“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.”