UK energy firms ‘chasing customers to pay more than they can afford’
Energy companies are adopting increasingly aggressive debt collection practices and sharpening their communications with customers to increase profits, a leading fuel poverty charity has warned.
National Energy Action (NEA) said householders are being forced into significantly worse situations than in previous years, including higher direct debits without change of usage, unaffordable debt repayment plans and prepayment meters, as energy companies accelerate debt collection to recoup costs.
The charity reported customers being “aggressively chased” for payments and said that letters and other communications from companies have become considerably sharper and arrive faster than normal.
With bills set to rise by 54% in April, which is expected to push even more people into debt, NEA warned that if energy companies do not change their practices it will lead to an increase in energy rationing and self-disconnections.
Customers told the Observer of being chased by debt collection departments within the 14-day bill payment period.
“What’s driving this is that over the past few months, suppliers have been unable to make a profit so chasing debt becomes much more important for them as a business and that’s what leads to this change in tactics to reduce levels of debt they see,” said Matt Copeland, the NEA’s head of policy and public affairs.
Energy companies are required by regulator Ofgem to set debt repayment plans based on what customers are able to pay. But Copeland said that when customers go into debt, companies are being “less proactive” in ensuring that repayment plans are affordable for customers.
Meanwhile, he said some customers are being subjected to the “double whammy” of unaffordable debt payment plans and rising direct
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