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Utility Warehouse ordered to pay £1.5m for customer debt issues

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Written by: Emma Lunn
10/11/2021
The energy supplier was fined by Ofgem for failing to treat some of its customers fairly and not helping those struggling with energy debt.

An investigation by the regulator found that Utility Warehouse customers were not consistently offered services such as debt repayment plans and energy efficiency advice. This left some of its customers disadvantaged and facing increased financial hardship.

Utility Warehouse accepts its failings and has agreed to pay £1.5m into Ofgem’s voluntary redress fund which supports vulnerable customers and innovation within the energy sector.

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

Ofgem found that Utility Warehouse didn’t consistently offer to put domestic customers struggling to pay their energy bills on debt repayment plans or allow payments to be taken direct from customers’ benefits. It also failed to take into account customers’ ability to pay when calculating regular instalments.

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

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 and 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.”

Justina Miltienyte, energy policy expert at Uswitch.com, said: “Energy suppliers have an obligation to offer repayment plans for customers who fall into debt. Ofgem is fulfilling its regulatory duties when unearthing poor supplier practices.

“This payment should send a clear message to all suppliers that they have to meet their obligations and consistently protect and support customers who are facing energy debt. The failure to offer debt repayment plans is unacceptable, and in this case, likely left some customers badly disadvantaged.

“Three million households are entering winter 2021 in energy debt – a worrying half a million more than last year. This highlights the extent of the energy debt issue, and the need for suppliers to do more.”

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