MSE News

Energy minister responds to Martin Lewis' call to address 'extraordinary gap' in protection for customers of bust energy firms

Energy Secretary Claire Coutinho has confirmed the Government will look for solutions to help people being chased for debts owed to defunct energy firms, who currently have no viable way to escalate complaints. It follows a letter sent by MoneySavingExpert.com (MSE) founder Martin Lewis calling for urgent action on the issue. 

Martin had written to the Energy Secretary after an MSE investigation into the practices of debt collector Barratt Smith Brown when chasing former Igloo Energy and Together Energy customers for debts. 

Our investigation revealed there is no viable route to redress, complaints or alternative dispute resolution for some customers of these bust energy firms. Unfortunately, that remains the case for now.

However, Ms Coutinho has said she will work with energy regulator Ofgem and the Insolvency Service (which oversees the conduct of company administrators) to "support resolution" of the issue – which we hope to see as soon as possible.

In the meantime, if you've been sent a letter or email about an energy debt, don't ignore it – see our previous MSE News story for help, including the steps you can take now.

Ms Coutinho's full letter to Martin Lewis 

                                                                                From: Rt Hon Claire Coutinho MP
Secretary of State
Department for Energy Security & Net Zero
55 Whitehall
London
        

To: Martin Lewis
Founder, MoneySavingExpert.com

Friday 22 March 2024

Dear Martin,

Thank you for your letter of 12 March 2024 on the issue of customers being chased by debt collectors acting on behalf of the administrators of failed energy suppliers that had previously supplied them.

I was deeply concerned to read about the issues you raised in your letter and was sorry to hear of the issues faced by former Igloo Energy and Together Energy customers.

It is important that even after a supplier stops trading that their customers are still treated fairly, and customers should not be approached for debt which they do not owe.

Following receipt of your letter, my officials have raised this case with the Insolvency Service, who lead on the conduct of insolvency practitioners. Officials at the Insolvency Service have been in close contact with the administrators in these cases, and I understand that there has been an ongoing process of engagement with the customers concerned.

I have also raised the case with Jonathan Brearley to ensure that Ofgem are aware and taking any appropriate action.

As noted in your letter, the regulatory landscape of this area is complex, and I agree that it is important and requires oversight so that customers can get to a resolution.

Under insolvency law, customers should seek to engage firstly with the collection agent and then, if they are unable to satisfactorily resolve the issue, they can then engage directly with the insolvency practitioner.

If the customer is unable to resolve their issue with the insolvency practitioner, and believes that the insolvency practitioner is at fault, they can make a complaint to the Insolvency Service’s Complaint Gateway. Those wishing to make a complaint can access the Complaint Gateway by visiting: https://www.gov.uk/complain-about-insolvency-practitioner

The Complaints Gateway cannot refer complaints which amount to a commercial dispute or offer a view on whether the debt is owed. For consumers in that position, they may wish to contact the Citizens Advice Consumer Service (CACS), which is the statutory consumer body for energy consumers.

CACS is a Government-funded advice service which can provide help and guidance on a range of consumer issues. Citizens Advice can be contacted through their website: https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/search-for-your-local-citizens-advice/ or by phone on the Citizens Advice Consumer Helpline by calling 0808 223 1133.

Ofgem expects insolvency practitioners undertaking any recovery action to treat consumers fairly, and as you are aware, suppliers cannot seek to recover unbilled debt dating back more than 12 months.

If an insolvency practitioner employs a debt collection agency, Ofgem expects the practitioner to ensure that the agency behaves and communicates with customers in accordance with the insolvency practitioner’s obligations and regulatory framework.

These duties should align with the energy supplier’s regulatory obligations, particularly those related to customer treatment.

I understand that the Insolvency Service is in communication with the administrators in these instances and has discussed the actions which their debt collectors are employing with regards to customers.

In response, the administrators have provided a detailed account of their work and have confirmed their adherence to back-billing rules, identifying and rectifying errors in records by applying appropriate discounts or closing accounts.

They have also ensured that the debt collectors they instruct are acting appropriately, taking swift action to prevent the recurrence of any issues.

Ofgem expects that customers that have received a bill should be given options within their control to settle, query and challenge this bill. Where a bill is outstanding, the customer should be given the opportunity to make an active choice of payment method including payment plans suitable to their circumstances.

The Insolvency Service has reassured me that such measures have been made available to customers in both of these administrations, including time to pay arrangements.

This is a serious matter, and officials within my department will continue to discuss the issues with counterparts at Ofgem and the Insolvency Service to support resolution.

Thank you again for raising this issue with me and your dedication to consumer advocacy.

Yours ever,

RT HON CLAIRE COUTINHO MP

Secretary of State for Energy Security & Net Zero

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