Energy firms still using debt collectors amid COVID-19 outbreak
Despite a promise from UK energy providers to help households during the Coronavirus pandemic, we’ve seen an increasing number of reports that companies are continuing to use debt collectors to chase up unpaid bills.
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British consumers who were struggling with their energy payments were promised payment plans and a generally supportive attitude from their providers in these trying times. It was also emphasised that no customers should be cut off during the lockdown.
According to a government agreement, energy providers were instructed to identify those customers who may be in financial difficulties and help them by reassessing, reducing or pausing bill payments during the lockdown period.
Business secretary Alok Sharma says the measures were being taken in order to provide UK households with “additional support and reassurance” during the pandemic.
Debt collectors flout government agreement
Reports from the Guardian state that, despite this, customers are still being targeted by debt collection agencies and told that action will be taken against them if they fail to pay their outstanding charges.
A letter sent on behalf of Shell Energy by debt collectors threatened customers that doorstep collectors would be sent to their home if they failed to pay the £78.51 outstanding debt on their account.
Not only this, but the letter also warned that the account holder’s details would be shared with credit reference agencies. This would hinder their ability to switch to another energy supplier, apply for a mortgage or borrow money in the future.
A Shell Energy spokesperson said that such letters as the one received above are “a last-resort attempt to engage with a customer”. He stressed that only after they have “repeatedly asked them to get in contact” to see how they can help is this measure taken.
Last resort or not, we think this flies fairly directly in the face of the government agreement. And Shell is not the only energy provider to flout it - both British Gas and Ovo Energy have said that they are continuing to use debt collectors in order to obtain payment. They did add, however, that these agencies had been instructed to offer financial support on their behalf.
E.ON has said that it won’t send new customers’ details to debt collectors, but that long-standing debts built up before the pandemic and the government agreement would continue to be pursued.
Businesses also targeted
A spokesperson for the government said that some providers had done the right thing, not only ceasing to follow up on debts but also offering to defer energy payments by up to three months, as part of a package of measures to make life easier for customers during the Coronavirus outbreak.
This is a worrying time for people across the country and we would expect energy companies to take the current circumstances into account as they carry out their business.” - A government spokesperson.
It’s discouraging that the largest, most high-profile suppliers have not been quite so understanding in their response. Even if debt collectors have been instructed to offer help on behalf of providers, hearing from debt collectors in itself is likely only to cause more distress to vulnerable households.
And it’s not just households that are being put under pressure by debt collectors during the outbreak - they have also been targeting microbusinesses, which have been hit hard by the measures taken to limit the spread of Coronavirus.
According to the director of the Energy Ombudsman, Ed Dodman, “the proportion of financially vulnerable microbusinesses coming to us for assistance is higher than it was before the outbreak, indicating that small businesses, in particular, may be struggling with these issues.”
Dodman makes it clear that while the pandemic doesn’t give households and businesses the right to avoid paying altogether, suppliers should be working with their customers to find a solution that suits both parties’ needs:
Energy suppliers must consider whether their customers are in financial difficulty and whether they can offer assistance. This is not a carte blanche for customers to avoid paying bills but suppliers should be sensitive to the circumstances of their customers on a case by case basis.