Energy firms could start chasing unpaid bills again next month

In a letter to energy firms, Ofgem chief executive Jonathan Brearley said that suppliers "cannot extend unlimited credit to customers" and were anticipated to restart debt management activities.

However the letter – which sets out the regulator's expectations of energy suppliers from Wednesday 1 July onwards – makes it clear that firms should continue to respect a voluntary agreement with the Government to support vulnerable customers during the coronavirus pandemic. This means firms shouldn't suspend credit meters if customers can't pay, and may reduce or pause bill or debt payments for those in need.

And companies have been warned that the regulator "will not tolerate sharp practice or aggressive debt collection" and could initiate enforcement action against those that use these methods.

The letter also tells firms that, going forward, coronavirus disruption generally won't be counted as an "exceptional circumstance" that would allow firms not to pay customers compensation if they don't meet guaranteed standards of service. That means that if, for example, an energy firm misses or cancels an appointment, it may need to pay compensation.

For more info on support with your energy bills during the coronavirus pandemic, including company-by-company help for prepay and credit meter customers, see our Coronavirus Finance & Bills Help guide.

What does Ofgem say?

In a letter to energy suppliers, Ofgem's chief executive Jonathan Brearley said: "Many domestic and non-domestic customers are struggling to pay their bills as a direct or indirect impact of Covid-19. We thank suppliers for the steps they have taken in recent months to provide these customers with support.

"Suppliers should continue to uphold the voluntary agreement with BEIS (the Department for Business, Energy and Industrial Strategy), and to provide support to impacted customers. However, we recognise that suppliers cannot extend unlimited credit to customers – nor is this in customers' interests overall – and we anticipate suppliers will begin to restart debt management activities that may have been paused during the immediate crisis.

"We expect suppliers (and any third parties contracted by them) to ensure that any debt management processes are fair and give careful consideration to the customer's circumstances and ability to pay – we will not tolerate sharp practice or aggressive debt collection, and suppliers could face enforcement action where this is the case.

"Suppliers need to consider how their approach to debt management should evolve going forward as they continue to deal with customers financially impacted by the Covid-19 crisis."