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Citizens Advice - Ofgem must set “ambitious vision” for vulnerable energy customers
Citizens Advice is calling on Ofgem to use its forthcoming vulnerability strategy to set out how it will better support vulnerable energy customers who fall behind on their bills.
The call comes in a new report - Supply and Final Demand - from the charity detailing the experiences of people in vulnerable circumstances - for example a disability or long-term health condition - who have been behind on their energy bills for over a month.
In 2018 Citizens Advice helped 43,232 people with energy debt problems through its local network. This was a 12% increase compared with 2017. Nearly half (48%) of these people had long-term health conditions or disabilities.
Since 2014, it has been more common for people to seek help from Citizens Advice about problems with essential bills, such as energy or council tax, than consumer credit e.g. credit cards.
The report revealed a number of common problems experienced by people in vulnerable circumstances once they get behind on their bills:
Energy suppliers’ approach to debt collection is often seen as aggressive and can make people’s problems worse
Vulnerable customers are unlikely to engage with support unless it is clearly framed as a way out of their problems
People in vulnerable circumstances face specific barriers to engaging with their supplier.
Liz, 32, who has a 9-year-old son with autism, received a gas bill that was much larger than expected. She thinks her son may have turned the immersion heating on. Her supplier was understanding when she called them, but then she received strongly worded letters that didn’t acknowledge the phone call. This left Liz feeling anxious and unsure where she stood.
Ofgem must ensure suppliers give more support to vulnerable people with energy debts
Citizens Advice is calling on the regulator to use its vulnerability strategy to make a number of reforms including:
Set clear targets for the sector’s performance on debt, for example to cut the number of people in arrears without arrangements to repay, or for the average level of debt repayments to decrease
Make it a licence requirement that suppliers follow principles designed to assess a consumer’s ability-to-pay when setting debt repayment levels
Compel suppliers to trial different approaches to communications with customers about debt, if suppliers fail to do so voluntarily
Work with DWP to review guidance for Fuel Direct - the system via which payments are deducted from benefits to pay arrears.
Gillian Guy, Chief Executive of Citizens Advice, said:
“The regulator needs to set an ambitious vision for how suppliers should support and protect vulnerable people who fall behind on their bills.
“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.”
Notes to editors
The figure of 43,232 people helped in 2018 covers face-to-face, phone, messaging and email advice contacts handled by local Citizens Advice offices and excludes contacts made to our consumer service and Extra Help Unit.
- The ability-to-pay principles were developed jointly between Ofgem and Consumer Focus (our predecessor body that carried out the statutory role of advocate for energy consumers) in 2010. The principles outline what suppliers should take into account to ensure that they are properly and proactively taking account of a customer's ability to pay. The principles are not directly part of the supplier licence conditions. Ofgem has said the principles will be taken into account when considering suppliers’ adherence to their licence obligations. Further information is available on these principles here.
- The National Audit Office (NAO) report ‘Regulating to protect consumers in the utilities, communications and financial services markets’ was published in March 2019. The NAO identified a need for regulators to set targets that are attributable to their regulatory performance and can measure performance in protecting the interests of consumers.
- Citizens Advice includes the national charity; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
- Citizens Advice is the statutory consumer advocate for energy and post. We provide supplier performance information to consumers and policy analysis to decision makers.
- The Citizens Advice Witness Service provides free, independent support for prosecution and defence witnesses in every criminal court in England and Wales.
- Citizens Advice offers Pension Wise services at 500 locations in England and Wales.
- Citizens Advice’s services are free, independent, confidential and impartial, and available to all regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- To get advice online or find your local Citizens Advice, visit citizensadvice.org.uk
- For consumer advice, call the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 to talk in Welsh.
- We helped 2.6 million people face to face, by phone, email and webchat in 2017-18. For service statistics see our monthly publication Advice trends.
- Citizens Advice staff are supported by over 23,000 trained volunteers, working at over 2,500 locations in England and Wales.
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