Ofgem allows utilities to resume debt collection as lockdown eases


UTILITY companies are allowed to restart debt collection from July but they could face enforcement action for aggressive practices against customers, Ofgem warns.

Gas and electricity customers can soon be approached by debt collectors and suppliers for unpaid bills, after the regulator told companies they no longer have to offer unlimited coronavirus payment holidays as the UK is gradually easing lockdown.

However, in an open letter to the energy industry, Jonathan Brearley, Chief Executive of Ofgem, stated he expects the customers to be treated fairly and reliable supply of energy must be ensured to everyone.

“Many domestic and non-domestic customers are struggling to pay their bills as a direct or indirect impact of COVID-19”, Mr Brearley wrote.

“Suppliers should continue to uphold the voluntary agreement with BEIS, and to provide support to impacted customers.

“However, we recognise that suppliers cannot extend unlimited credit to customers – nor is this in customers’ interests overall – and we anticipate suppliers will begin to restart debt management activities that may have been paused during the immediate crisis.

“We expect suppliers (and any third parties contracted by them) to ensure that any debt management processes are fair and give careful consideration to the customer’s circumstances and ability to pay – we will not tolerate sharp practice or aggressive debt collection and suppliers could face enforcement action where this is the case.

“Suppliers need to consider how their approach to debt management should evolve going forward as they continue to deal with customers financially impacted by the COVID-19 crisis.”

The letter goes on to set up a framework for companies to operate in as the country comes out of lockdown but highlights that government advice and guidance will take precedence over Ofgem advice if conflict was to arise between the two.