Sharon McDougall - 30th June 2020 - 2 minutes to read
Ofgem has said that debt collectors can resume their work of pursuing payments from energy bill debtors across the country from July.
The energy sector regulator recently introduced rules that prevented debt collectors from going after money owed to gas and electricity companies in response to the coronavirus pandemic.
However, it is no longer being required of energy suppliers that they offer their customers payment holidays and debt collectors are being given the green light to resume the pursuit of debts associated with overdue energy bills.
Ofgem has told energy suppliers that they should not resort to “sharp practice or aggressive debt collection” and that they should be mindful of the circumstances of individual debtors and their ability to pay.
A great many people across Scotland and the UK have seen their incomes being depleted or lost all together during the COVID-19 crisis and millions have taken advantage of payment holidays in relation to some or all of their debts.
Council tax debts and parking fines are not currently being pursued by debt collectors and won’t be until at least September.
However, Ofgem’s view is that it will not be in the long-term interests of gas and electricity consumers to be given unlimited credit or to be shielded from debt collector activities in relation to energy debts.
In a letter to suppliers, Jonathan Brearley from Ofgem said: “We recognise that suppliers cannot extend unlimited credit to customers – nor is this in customers’ interests overall.
“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.”
Ofgem recently announced that it intends to consult with relevant stakeholders about how energy suppliers might be able to better help people in financial distress and, particularly, those who use pre-payment meters.
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