The Energy Advice Line has warned energy consumers to be vigilant about the amount they pay for their energy as new figures showed an increase in the number of customers in debt to energy suppliers.
In its Domestic Suppliers' Social Obligations 2013 annual report, Ofgem found that the total number of customers accounts in arrears rose in 2013, although the amount owed was similar to the previous year.
The report said that with household budgets stretched, suppliers should be doing all they could to help struggling customers pay.
Julian Morgan, managing director the Energy Advice Line, said it welcomed the energy regulator’s plan, outlined in the report, to investigate how suppliers communicated with customers who were in debt.
“In recent years, the regulator has focused much of its attention on pricing and bills, so now it’s right that it examines whether suppliers are meeting their obligations when it comes to customers who are struggling to pay,” Mr Morgan said.
“Ofgem needs to ensure that suppliers are meeting the rules that require them to treat customers fairly and to agree to payment plans that match the financial circumstances of those struggling to pay.
“We know that there are ways for customers to help ensure they keep their bills as low as possible, but with prices skyrocketing in recent years it’s only right that suppliers do what they can to help those who simply can’t make ends meet.
“It’s welcome news that Ofgem is going to look into this area.”
In the report, Ofgem said prepayment meters (PPM) were a particular area of concern, as the number of customers using them continued to rise in 2013 to approximately 7 million.
PPMs are often installed by suppliers to recoup debts, with a proportion of each top-up payment used to pay off arrears. Although the meters can be used by customers to reduce their debts and budget for their bills, paying for energy this way can be over £80 a year more expensive than pay as you go energy meters.
Moreover, customers are sometimes prevented from switching if a supplier does not voluntarily allow them to leave.
“We very much welcome Ofgem’s decision to make it obligatory for suppliers to allow customers on PPMs to switch if they are less than £500 in arrears,” Mr Morgan said.
“It makes no sense to force these customers to pay more than they need to, and switching is the best way to reduce energy bills overall.
“We also welcome Ofgem’s decision to force suppliers to make it easier for customers on PPMs to switch.
“Shopping around and giving your business to suppliers offering the best deals is by far the best way to get on top of your energy bills, and many customers using PPMs would benefit greatly by reducing their bills.
“We look forward to seeing what initiatives Ofgem can come up with to better support customers in financial difficulty.”
The Energy Advice Line is one of the UK's leading price comparison and switching services for business and domestic energy customers. It is also an advocate for energy market reform and has campaigned for a better deal for energy users, including calling for a ban on cold calling and changes to regulations to make it easier for all consumers to switch suppliers.
The service is completely independent and free. Consumers can quickly and simply search the market for the best available energy deals from an extensive panel of small and large energy suppliers. The service also offers a free advice service for business energy customers throughout the to of their energy contracts.
For further information visit www.energyadviceline.org.uk