The UK energy regulator Ofgem has been told it needs to set out a vision to better support vulnerable customers.
A new report from the consumer group, Citizens Advice, has highlighted how vulnerable energy customers in the UK are more likely to fall into debt and that more needs to be done to protect them. The report revealed that Citizens Advice helped 43,232 people with energy debt problems in 2018, up 12% from the previous year. And of these people struggling with debt, nearly half (48%) of them had disabilities or long-term health conditions.
According to Citizens Advice, one of the most common issues reported by vulnerable customers falling behind on energy bills was the approach of their energy supplier towards their debt. The report found that the approach of the energy suppliers towards debt collection was ‘aggressive’, often aggravating the problems that vulnerable consumers face. The report also found that vulnerable customers were less likely to seek support unless it was ‘clearly framed as a way out of their problems’.
“The regulator needs to set an ambitious vision for how suppliers should support and protect vulnerable people who fall behind on their bills,” said Gillian Guy, chief executive of Citizens Advice.
“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.”
Citizens Advice is advising Ofgem to make several reforms in its upcoming Consumer Vulnerability Strategy, such as setting clear targets for the industry’s performance on debt. The regulator has been urged to reduce the number of people in debt who have no arrangement to pay it back, and to decrease the average level of debt repayments. The consumer group also wants energy suppliers to require a licence that shows they can properly assess a customer’s ability to make debt repayments.
“Protecting consumers, especially the vulnerable, is at the heart of what Ofgem does as Britain’s energy regulator,” said a spokesperson for Ofgem. “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.”
Matthew Vickers, chief executive of 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.”