Ofgem has launched an investigation into the way Utility Warehouse manages its customers who are in debt.
The regulator said it will investigate if the supplier has breached rules related to the way it manages these customers.
It will consider if Utility Warehouse, which bundles energy, phone and broadband services into one bill, puts in place “appropriate repayment options” for its indebted customers.
Ofgem said: “This includes whether it does enough to try and contact customers in or at risk of debt and to establish with them manageable repayment plans based on their ability to pay, as Ofgem’s rules require.”
The regulator will also investigate whether the company is installing pre-payment meters appropriately as a means of recovering debt from customers, particularly when they install them under warrant.
Ofgem added: “The opening of this investigation does not imply that there’s been any non-compliance by the supplier.”
Utility Warehouse, which is fronted by Joanna Lumley on its website, claims to have more than 600,000 members in its “discount club”.
A spokesperson for the company, said: “Utility Warehouse is surprised and disappointed that Ofgem has decided to launch a formal investigation into some of our processes. An independent audit of these processes late in 2017 gave an overall positive report with a number of best practise recommendations now having been fully implemented.
“We will, of course, work alongside Ofgem to ensure that this investigation is concluded.”
Victoria MacGregor, director of energy at Citizens Advice, added: “When dealing with customers in debt, it’s essential that firms consider people’s ability to repay those debts and ensure that any payment plan is affordable and sustainable.
“Measures brought in earlier this year by Ofgem to protect vulnerable customers who are switched to prepayment meters are welcome. But, with prepayment meters used as one of the main methods to recover debts, suppliers must have systems and processes to make certain that vulnerable customers are not left without supply.”
The news follows Ofgem’s announcement yesterday (31 May) when it revealed it issued a statement of objections to Economy Energy and E (Gas and Electricity), along with consultancy firm Dyball Associates over allegations of breaching competition law.