Citizens Advice is calling on energy industry regulator Ofgem to use its forthcoming vulnerability strategy to set out how it will better support those customers who fall behind on their energy bills.
Specifically the consumer advocate for energy is calling on the regulator to use its strategy to make a number of reforms including setting clear targets for the sector’s performance on debt and making it a licence requirement for suppliers to follow principles designed to assess a consumer’s ability to pay when setting debt repayment levels.
It also calls on Ofgem to compel suppliers to trial different approaches to communications with customers about debt, if they fail to do so voluntarily and to work with the Department of Work and Pensions to review guidance for Fuel Direct – the system via which payments are deducted from benefits to pay arrears.
Gillian Guy, chief executive of Citizens Advice, said: “The regulator needs to set an ambitious vision for how suppliers should support and protect vulnerable people who fall behind on their bills.
“Both Ofgem and suppliers need to take action and help people get over the barriers that stop them from seeking help and getting the right advice and support.
“The package of support that’s on offer needs to be sensitive. Aggressive collection practices and demands for unaffordable payments only serve to make people’s lives more difficult.”
A report by Citizens Advice published today (17 May) details the experiences of vulnerable customers such as those with disabilities or a long-term health condition who have been behind on their bills for over a month.
It reveals a number of common problems experienced by people in vulnerable circumstances once they get behind on their bills:
- Energy suppliers’ approach to debt collection is often seen as aggressive and can make people’s problems worse
- Vulnerable customers are unlikely to engage with support unless it is clearly framed as a way out of their problems
- People in vulnerable circumstances face specific barriers to engaging with their supplier
Since 2014, Citizens Advice says, it has been “more common” for people to seek help from them about problems with essential bills, such as energy as opposed to with consumer credit (e.g. credit cards).
Last year 43,232 people were assisted by Citizens Advance in dealing with energy debt problems – a 12 per cent increase compared with the year previously.
Nearly half of these people (48 per cent) had long-term health conditions or disabilities.
In response to Citizens Advice an Ofgem spokesperson said: “Protecting consumers, especially the vulnerable, is at the heart of what Ofgem does as Britain’s energy regulator.
“We have nearly eradicated disconnections for debt and put in place price caps for consumers on prepayment meters and on standard tariffs, which ensure most vulnerable consumers pay a fair price for their energy.
“We welcome Citizens Advice’s important contribution to the debate on what further action we can take to protect consumers and we will be consulting on our new strategy setting out further measures to help vulnerable customers later this summer.”
Meanwhile Matthew Vickers, chief executive at the Energy Ombudsman, said: “These findings from Citizens Advice raise some valid points on the need to ensure vulnerable energy customers have adequate support and protection.
“The energy sector as a whole has made good progress on vulnerability and it’s right that Ofgem, as the regulator, regularly reviews its approach to this important issue.
“As an ombudsman we are also reviewing and updating our approach to vulnerability. Ensuring that all consumers can access our service, regardless of their circumstances, is a key priority for us.”