Households hounded by 'aggressive' debt collectors after 11 energy suppliers go bust in 18 months – your rights

Households hounded by 'aggressive' debt collectors after 11 energy suppliers go bust in 18 months – your rights

June 21, 2019

THOUSANDS of households are at risk of being hounded by "aggressive" debt collectors on behalf of energy companies after 11 smaller firms went bust in the past 17 months.

Charity Citizens Advice has warned that 32,000 households in debt to their suppliers could be chased for the cash by the administrators who took over these companies.

Since the start of 2018, 11 small energy firms have gone bust – Brilliant Energy, Economy Energy, Extra Energy, Spark Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U, Usio Energy, One Select, and Electaphase Energy.

When energy suppliers fail, regulator Ofgem appoints a new provider for customers to ensure a continued energy supply, while the old supplier is taken over by administrators.

But where customers owe cash to their supplier it's up to the new provider whether to take these debts on.

What are your rights if you owe money to an energy firm?

ENERGY regulator Ofgem has set out rules energy firms must follow if you owe them money for any unpaid bills.

Firms must offer you a manageable repayment plan when paying off your debts.

When putting the plan together, they must take into account your other debts and how much you can afford to pay the firm.

Once you start paying them back, they have a responsibility to keep checking in with you to see if it's still manageable.

Debts that have been bought by an administrator don't have to follow these guidelines.

They have the right to send bailiffs to your home to collect the cash.

It can be extremely distressing to have a bailiff at your front door, but you have rights and shouldn't be bullied.

What are my rights when a bailiff visits my home?

Bailiffs can't enter your home:

  • By force, for example by pushing past you (unless in the below scenario)
  • If only children under 16 or vulnerable people (with disabilities, for example) are there
  • Between 9pm and 6am
  • Through anything except the door.

Things a bailiff can't take from you:

  • Things you need, such as your clothes, cooker or fridge
  • Work tools and equipment worth a total of less than £1,350
  • Someone else's belongs, such as your partner's computer. Just keep in mind you'll have to prove that someone else's goods don't belong to you.

Read our guide for a full list of your rights if a bailiff visits your home and how to stop them visiting.

 

If it doesn't it could leave the administrator chasing customers for the cash.

The problem is that Citizens Advice says administrators are not bound by the same rules as suppliers, which means they can pursue debts more aggressively.

It adds that this can leave customers asked for cash at very short notice and have the amounts they are being chased for go up overnight.

Since January 2018, Citizens Advice has helped over 1,000 people with debt issues related to failed suppliers, who owe £250 on average.

In a separate issue, Citizens Advice also warns that consumers could be footing a £172million bill for these firms going bust.

That's because other energy suppliers have to foot the bill for renewable generation, infrastructure and metering when a supplier goes under.

The charity fears that it will be passed onto consumers through hiked energy bills and debt collection from customers who owed the failed firms cash.

Is it safe to switch to a small energy provider?

FED-UP with sky high energy prices and poor customer service from the Big Six energy firms? Then you could save a packet by switching to a smaller firm.

Research from Which? has found customers with smaller and medium sized firms such as Utility Warehouse, Flow Energy and Octopus Energy are much happier than those with the major firms – and could save a whopping £333 a year by switching.

The biggest risk of choosing a small provider – like Our Power – is that it goes bust.

But remember that if the firm does go under you won't be cut off, and Ofgem will try and get a new supplier in place as quickly as it can.

Once it has done this, the new firm will contact you – it doesn't have to honour the deal you were on with the defunct firm – but under Ofgem rules any credit you have on your account is protected.

If you're unhappy with the new supplier's offer you are free to shop around for a new deal and switch – you won't have to pay any exit fees to leave.

Citizens Advice wants to see action to "fix the protection gap" for customers who owe money to energy suppliers when they collapse and that administrators should follow the same rules as suppliers.

It says as upcoming energy white paper – a Government report that proposes changes on issues – is the ideal opportunity for lawmakers to "close the gap in protections and limit the cost to consumers of any future supplier failures".

Gillian Guy, chief executive of Citizens Advice, said: "Consumers shouldn't have to foot the multimillion-pound bill left behind when companies collapse – and they certainly shouldn't lose their usual protections in the process."

Energy UK director of policy, Audrey Gallacher said that suppliers "fully support" existing consumer protection requirements to be extended to administrators.

She added: "The increase in competition and the number of suppliers in recent years has been great for customers in providing choice and driving down prices.

"But we welcome Ofgem bringing in tougher checks for suppliers entering and operating in the market to ensure they have sustainable business models and are adequately financed to serve their customers.

"Ofgem now needs to ensure that the ongoing operation of companies is monitored to minimise the risk of additional costs being loaded on to consumers."

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