28/04/2020

Energy companies still using debt collectors during COVID-19 crisis

28/04/2020

Energy companies still using debt collectors during COVID-19 crisis

SHARE THIS

It has been revealed that energy firms are still using debt collectors to pursue people for household gas and electricity arrears during the COVID-19 crisis.

This is despite over one million UK residents having been forced into claiming Universal Credit and other social security benefits over the last few weeks and many having to wait up to five weeks before they receive their first payment.

It is also despite the fact that only recently, energy providers entered an agreement with the UK Government saying they would work with customers who were adversely affected financially by the crisis and promised to provide them with extra support.

Threatening letters

Some of the letters that are being sent out are reported to be warning customers that arrangements may be put in place for doorstep collectors to visit them; and that their credit rating may be damaged if their details are shared with credit reference agencies.

These revelations will come as a surprise to many and appear to show that energy firms are acting contrary to the spirit of the recent supportive statements that were issued by the UK Government and the UK’s gas and electricity regulator, OFGEM.

What should you do if you have arrears?

If you are struggling to maintain your normal monthly payments to your gas and electricity provider, or indeed if you had arrears prior to this crisis, what you should do is contact your supplier.

If you have been adversely affected financially by the COVID-19 Crisis, you should inform them of this and ask that they show you some forbearance until your situation improves.

If a lender shows you forbearance, this means they should exercise restraint and exercise some flexibility towards you. In practice this means lenders should be prepared to enter into repayment plans and consider allowing you to repay your arrears over time, usually through monthly instalments. Alternatively, it may mean they give you a payment break.

Usually, the most important thing that you can do is pay your current bill each month for the fuel that you are actually using. To ensure you are not paying more than you should, you should provide the lender with an accurate reading from your gas and electricity meter.

Can you have your gas and electricity disconnected?

Although legally it is possible for lenders to disconnect your gas and electricity supply; during this crisis, OFGEM has said no-one should be disconnected.

Even in normal times, although it is legally possible for a fuel provider to disconnect you, it is actually extremely rare. This may come as a surprise to many as it is often threatened when people fall into arrears.

Instead, if you are experiencing financial difficulties, lenders should aim to enter into a repayment plan with you first; or alternatively, as a last resort, install a pre-payment meter.

Don’t pre-payment meters mean you disconnect yourself?

This is the main concern that many people have with pre-payment meters: that you will be forced to disconnect yourself if you cannot top up the meter. This is a particularly the case for many who may be self-isolating during this crisis.

If this is you, what OFGEM are recommending is people should first try and get family or friends to top up for them if possible, or instead it may be possible to do so online.

However, failing this, people should contact their provider and let them know what their situation is. The provider may then send someone out to top up your meter, or instead add credits to your meter or send out a pre-loaded top up card by post.

What if there are vulnerable people in your household?

If there is anyone in your household that is vulnerable, you should let your fuel provider know. This can mean anyone having to self-isolate because of a pre-existing condition or disability or anyone of pensionable age or under the age of 5 years old.

All fuel providers should maintain a Priority Services Register, which is a register of people who require additional support. If you believe you or anyone in your household is vulnerable, for the reasons above, you should contact your energy provider and ask to be included onto their Register.

Is there additional support available?

Most energy providers will operate a hardship fund. If you are experiencing financial hardship you should speak to your lender and ask about this. If you can make an application this will often mean been given a grant to help pay off your arrears; or alternatively funds to buy other essential white goods, like fridge freezers and cookers for your home.

If you are experiencing financial difficulties or have been contacted by debt collectors during this crisis, we would like to hear from you. We can offer free money advice to you if your call 0808 2234 102.

 

Latest Articles

12/12/2019

Living standards questioned as over 270k Scots turn to their local Citizens Advice

More than 270,000 Scots have turned to their local Citizens Advice this past year, with 44% cases relating to benefits, new figures have revealed. Citizens Advice Scotland (CAS) has revealed in its latest annual report, ...

04/06/2020

700 jobs axed at Rolls-Royce in Renfrewshire

Aero-engine company Rolls-Royce has announced it will cut 700 jobs from its Renfrewshire plant. The news comes as the engineering giant announced plans to shed 9,000 jobs across the globe – around 20% of its ...

26/05/2020

New debt laws announced amidst fears or rising problem debts during COVID-19 crisis

The Scottish Parliament has passed a series of new debt laws that are intended to help people struggling with problem debt, as a consequence of the COVID-19 crisis. The laws, which were passed on May ...

19/05/2020

Covid-19 – Scottish unemployment levels rise to 113,000 

According to new data from the Office for National Statistics (ONS), the number of people currently claiming unemployment benefit in Scotland has increased to 113,000 and the rate of unemployment is currently at 4.1%.   The ...