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Court action against people behind on energy bills on the rise, warns Citizens Advice

Citizens Advice is warning of a worrying rise in court action against people who are behind on energy bills

  • Charity says it’s helping increasing numbers of people facing court action from their energy supplier
  • County court judgements (CCJs) can ruin people’s finances for years, with one man saying court action over bills destroyed his chances of getting a mortgage
  • Citizens Advice says Ofgem must clamp down on aggressive debt collection in the industry, which can push people further into debt

While the numbers affected are small at the moment, the number of people it helped who received a county court judgement (CCJ) from their energy supplier increased last year. The charity is concerned this could end up plunging people further into debt.

A CCJ can ruin someone’s finances for years by forcing them to pay higher costs on loans, credit cards and mortgages. This type of court order can also force people into payment plans they can’t keep up with.

Citizens Advice has chosen to sound the alarm now as energy suppliers have fewer options to restrict the build-up of energy debt, due to newly strengthened Ofgem rules on the force-fitting of prepayment meters. The charity is concerned suppliers could increasingly turn to debt collection practices like CCJs, an area where consumer protections are more limited.

The charity is also concerned energy suppliers will take advantage of their ability to use bailiffs to enforce CCJs. The Consumer Credit Act bans this practice for other types of debt.

The latest analysis from Ofgem shows energy debt rose by £2.8 million a day in the last six months of 2023, reaching a record figure of £3.1 billion.

Citizens Advice is calling for a long-term plan to tackle spiralling energy debt, including new protections for people who are in debt to their supplier. Currently, there are no rules on when it is acceptable for suppliers to use CCJs.

Madison Stefanuik, Debt Caseworker at Citizens Advice Plymouth - a specialist energy advice hub, said:

“People are coming to us about this problem more and more often. It’s usually people who are struggling to make ends meet, often trying to prioritise rent and council tax. As a result, they’ve fallen behind on energy bills and have been hit with a CCJ. 

“Since rules were tightened on prepayment meters, we’ve noticed some energy suppliers are increasingly using CCJs and sending in bailiffs to force customers to pay their debts.

“What’s troubling is that energy debts aren't regulated by the Consumer Credit Act, meaning suppliers can go to the high court quite quickly after a CCJ has been granted - at which point bailiffs can get involved. This is when people usually come to us for help, because they’ve got aggressive bailiffs knocking at the door and don’t know what to do.”

‘I’m never going to get a mortgage now’ - Nik’s story

Nik, who’s 40, is self-employed and lives in Bristol. He was handed a CCJ whilst he queried high energy bills which he says were incorrect. Nik has struggled to communicate with his supplier to get the issue resolved and has been repeatedly chased by debt collectors for the money and threatened with bailiffs. After recently reviewing his case, Nik's supplier has written to its debt collection agency asking for his CCJ to be withdrawn - but cannot guarantee it will be.

The CCJ has destroyed Nik’s credit score, his hopes of applying for a mortgage, and added £500 onto his car insurance. He said: 

“I was hoping to get a mortgage in the next couple of years and get on the property ladder, but that’s down the pan now. It's all been swept from under my feet and I don’t know how. At this point I feel like giving up. It’s had a detrimental effect on my mental health and my life. 

“Now they’re threatening bailiffs. I’m worried about them coming through my door. Imagine if someone turned up and tried to take my vehicle. That’s my bread and butter. I’m self-employed and if I’ve got no wheels, I can’t make any money. How the hell can you be treated like this?”

Millions struggling to pay their bills

The removal of government support schemes means average energy costs are as high as last winter for many households. Although energy prices are coming down in April, this will be too little too late for those who’ve already fallen behind. 

Citizens Advice says 5.3 million people currently live in households in debt to their supplier, potentially putting them at risk of harsher debt collection practices.

One man from London told Citizens Advice the CCJ he received from his supplier ruined his credit score and led to bailiffs sitting outside his house for weeks, who eventually took his car. A pensioner with severe osteoarthritis also told the charity she’d been threatened with debt collectors and court action, despite telling her supplier she receives government support on bills.

The charity says suppliers must do more to identify people’s circumstances before using heavy handed tactics, and should limit their use at all costs.

Some energy companies agreed to provide additional voluntary protections this winter for customers who are behind on bills, including tighter rules on CCJs and bailiff action. Citizens Advice is now calling on Ofgem to adopt these as permanent rules for all suppliers. 

Dame Clare Moriarty, Chief Executive of Citizens Advice, said:

“Our frontline advisers are already helping more people than ever struggling to pay their energy bill. Taking people to court over unpaid bills that they simply cannot afford to pay cannot be the right answer.

“Getting a CCJ can be devastating. It can ruin people’s finances and plunge them further into debt. That’s why Ofgem must introduce new permanent protections to halt this worrying trend as soon as possible.” 

Notes to editors

  1. Between 2020 and 2022 Citizens Advice saw only a 30% increase in the number of people it helped facing a CCJ from their energy supplier. But last year that number nearly doubled, jumping from 179 in 2022 to 349 in 2023.
  2. The charity thinks aggressive debt collection practices like CCJs will continue to rise this year because of record energy debt. This January, the number of people it helped facing a CCJ from their supplier was more than twice as many as January 2023. 
  3. High Court Enforcement Officers, a type of bailiff, cannot be used for consumer credit debts, due to protections in the Consumer Credit Act, but can be used for energy debts.
  4. Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
  5. Our network of charities offers impartial advice online, over the phone, and in person, for free. 
  6. Citizens Advice helped 2.66 million people face to face, over the phone, by email and webchat in 2022-23. And we had 60.6 million visits to our website. For full service statistics see our monthly publication Advice trends.
  7. Citizens Advice service staff are supported by more than 16,000 trained volunteers, working at over 1,600 service outlets across England and Wales.
Original article link: https://www.citizensadvice.org.uk/about-us/media-centre/press-releases/court-action-against-people-behind-on-energy-bills-on-the-rise-warns/

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