Ofgem has confirmed plans to strengthen protections for customers who are struggling to pay their energy bills in winter. Following a consultation in June, Ofgem is introducing new license rules for suppliers from 15 December.
One will require suppliers to offer emergency credit to customers struggling to top up their prepayment meter, many of whom are likely to be in vulnerable circumstances. This could be because they temporarily cannot afford to top up or get to their local shop to top up because of a mobility issue or due to self-isolation for example.
extra prepayment credit
Suppliers will also have to offer extra prepayment credit for households in vulnerable circumstances to provide more breathing space while working out alternative arrangements to pay.
These requirements will help reduce the number of prepayment customers who go without energy or “self-disconnect” after running out of credit on their meter. In March, suppliers voluntarily agreed to support vulnerable customers through COVID-19, including those on prepayment meters facing difficulties in topping up. The new license rule will require suppliers to offer this extra protection.
new license rule
Suppliers will have appropriate credit management policies, make proactive contact with customers
Another new license rule Ofgem is introducing will require suppliers from 15 December to put customers in debt on realistic and sustainable repayment plans.
This means suppliers will have appropriate credit management policies, make proactive contact with customers, and set repayment rates based on their ability to pay. Many suppliers already have this in place, but making it a formal license requirement will ensure more customers are helped.
capped and reduced default tariffs
Philippa Pickford, Director of Retail at Ofgem, said, “Suppliers have stepped up to the challenge of supporting their customers during the COVID-19 crisis, especially those in vulnerable situations. Customers who are struggling to pay their bills should contact their supplier as soon as possible."
"The extra protections we have announced today will help ensure they get some breathing space this winter. Alongside our wider program of support for vulnerable customers, Ofgem has also capped and reduced default tariffs so these customers always pay a fair price for their energy.”
