Energy suppliers using county court judgements (CCJs) for customers in debt is on the rise, destroying households' credit scores in the process, a charity warns.
The number of people who sought the help of Citizens Advice following a CCJ due to debt on their energy bill doubled in 2023.
While the number rose to 349 last year, the charity has raised concerns that the number will continue to surge as the number of those in energy debt does.
This is because there are 5.3 million people in debt to their suppliers, the charity finds. In the process, the amount of energy debt rose by £2.8m per day in the last six months of 2023, hitting a record figure of £3.1bn, according to Ofgem.
Further, the removal of Government support schemes has also increased the cost of bills to what they would cost during the winter, despite prices dropping in April.
Concern over energy suppliers’ force-fitting ban reaction
It follows the regulator tightening the rules on force-fitting prepayment meters for residents, with over £500,000 set to be refunded for those affected. New rules mean those including over-75s and those that have children aged under two unless it is a “matter of last resort”.
The ban halted the bad behaviours of some debt collection agencies and meant those on old meters could build up energy debt and pay it off at a more suitable time. However, Citizens Advice believes the changes will lead to more use of bailiffs to enforce CCJs by energy firms.
Meanwhile, one self-employed worker from Bristol was given a CCJ as he queried the amount of his high bills.
After discussions with his energy supplier, the firm agreed the bills were incorrect and moved to remove the CCJ from the debt collection agency – but it is not clear whether it will be overturned.
So, due to his poor credit score, his hopes of securing a mortgage are up in the air and his car insurance has shot up by £500.
Regulation gaps for customers are ‘concerning’
Madison Stefanuik, an energy advice specialist at Citizens Advice, says the people coming to the charity for help are “usually struggling to make ends meet, often trying to prioritise rent and council tax.”
Stefanuik said: “Since rules were tightened on prepayment meters, we’ve noticed some energy suppliers are increasingly using CCJs and sending in bailiffs to force customers to pay their debts.
“What’s troubling is that energy debts aren’t regulated by the Consumer Credit Act, meaning suppliers can go to the high court quite quickly after a CCJ has been granted – at which point bailiffs can get involved. This is when people usually come to us for help, because they’ve got aggressive bailiffs knocking at the door and don’t know what to do.”
It has led to calls for Ofgem to “clamp down on aggressive debt collection in the industry” and the introduction of more rights for residents struggling with their energy bills.
‘Ofgem must introduce new protections’
Dame Clare Moriarty, chief executive of Citizens Advice, said: “Our frontline advisers are already helping more people than ever struggling to pay their energy bill. Taking people to court over unpaid bills that they simply cannot afford to pay cannot be the right answer.
“Getting a CCJ can be devastating. It can ruin people’s finances and plunge them further into debt. That’s why Ofgem must introduce new permanent protections to halt this worrying trend as soon as possible.”
If you are struggling to pay your energy bills, help is available on the Citizens Advice website.
