Energy UK plays a leading role in the development of industry best practice in the areas of debt and disconnections. Energy suppliers recognise that vulnerable customers need to be protected from disconnection.
Safety Net for Vulnerable Customers
As the Energy Retail Association, in 2004, our members signed up to the Safety Net for Vulnerable Customers. It includes a commitment to never knowingly disconnect vulnerable customers. Where a customer has been disconnected and then is identified as vulnerable, the supplier will reconnect their customer as a priority. Compliance with the Safety Net is independently audited. The number of disconnections has steadily dropped over the past few years and has reached historically low levels.
Why is disconnection used?
Disconnection is only ever used as a last resort. It follows a lengthy attempt by the supplier to recover a debt. It is rarely used and only in cases where customers won't pay their bills.
Before disconnection is considered, suppliers try to find out the customer's circumstances and set up an affordable payment plan. The Safety Net gives information on how suppliers protect vulnerable customers from disconnection.
Although suppliers do not want to disconnect their customers and go to great lengths to avoid it, in the interests of their other customers, it is a sanction that must remain. Energy UK believes that if this deterrent didn't exist, debts would rise across the industry and affect all customers, including those on low incomes. It is not fair that customers who do pay - including those in, or at risk of fuel poverty - pay for customers that can afford to pay but choose not to.
How prepayment meters help to avoid disconnection
Many customers choose to pay for their energy via a prepayment meter (PPM), often because it helps with budgeting. PPMs are also used to help avoid disconnections. Suppliers will not install a PPM unless it is safe and practical to do so.
Energy UK's work to help lower customer debt
Energy UK works with the Regulator, Consumer Groups and others to make sure the debt and disconnections pathway considers customers' needs. For example, in instances where there has been no contact with the customer, we worked with Ofgem, as part of their 2011 Spring Package, to get agreement from the suppliers to visit the customer's premises first. This visit must take place before the customer is remotely disconnected or switched to prepayment.
Suppliers are aware that customers who are struggling to pay may have other debts. This is one reason why Energy UK and suppliers work so closely with the money advice sector, including organisations such as Citizens Advice, the Money Advice Trust and the Money Advice Liaison Group.