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Utility Warehouse Agrees to Pay £1.5m for Failing Customers in Debt


Challenger energy supplier Utility Warehouse has admitted that it failed to treat indebted customers fairly and consistently over a number of years and will pay £1.5 million into Ofgem’s redress fund for the shortcomings.

An investigation by the energy regulator revealed that between 2013 and 2019 Utility Warehouse failed to consistently offer support, including debt repayment plans and energy efficiency advice, to customers in financial difficulty, leaving some disadvantaged.

Ofgem found that Utility Warehouse did not consistently offer to put domestic customers struggling with their bills on debt repayment plans or take into account customers’ ability to pay when calculating instalment plans. 

It also failed to offer customers other support mechanisms, as required, including letting payments be taken directly from customers’ benefits or the voluntary installation of a prepayment meter. It also didn't offer energy efficiency advice to help struggling households reduce their gas and electricity consumption.

In some cases, these failures led to the unnecessary involuntary installation of a pre-payment meter.

Utility Warehouse also submitted some inaccurate Social Obligation Reporting (SOR) data to Ofgem between the same dates, hiding its performance with respect to its social obligations and compliance with licence requirements.

Utility Warehouse has accepted these failings and put in place measures to prevent them from happening again. It will also pay £1.5 million into a voluntary redress scheme that supports vulnerable customers and innovation within the energy sector. Because Utility Warehouse has taken these steps, Ofgem has agreed to close the investigation and won’t take further disciplinary action against the supplier.

Cathryn Scott, Director of Enforcement and Emerging Issues at Ofgem, said: “Energy suppliers are required to look after their customers, especially those in vulnerable situations. Between 2013-2019, Utility Warehouse failed to take the necessary steps to treat some customers in payment difficulty fairly, depriving them of the opportunity to manage their energy debt and ongoing energy costs.

“While the unprecedented and unexpected rise in gas and electricity prices over recent months has put energy markets under severe strain, we expect suppliers to continue to comply with their licence obligations and treat people fairly, including by providing support to vulnerable consumers. Where we see poor behaviour, Ofgem will be ready to step in and take swift action.”

Utility Warehouse sells bundled utilities, including gas and electricity, and broadband and mobile services, through independent distributors in a multi-level marketing structure. It has around 650,000 customers across the services and recently claimed to offer gas and electricity tariffs priced at 5% below the price cap.

Lauren Smith
Lauren Smith

Lauren Smith has worked as a journalist and copywriter for most of the last decade, covering technology, energy, and consumer rights, in the US and UK.

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