Energy firms ‘let customer debts reach £1k before offering support’

ENERGY companies are allowing families and pensioners accrue debts of up to £1,000 before offering them help.

Customers are being hit with rip-off tariffs and then trapped when they owe lots of money. The average debt on a gas or electricity bill reaches more than £600 before many companies will step in, provide support and set up a repayment plan, a report has shown.

But thousands of the poorest families and pensioners can owe more than £1,000 before being offered support.

The large debts can arise partly from the fact many of these households have never changed their energy supplier.

This means they are on the highest standard variable tariff, which can cost up to £300 a year more than the cheapest deals available.

Evidence from the industry regulator, Ofgem, published today, reveals that rather than switching these people to a cheaper deal, firms allow them to run up debts. Ofgem named and shamed several companies it has told to take urgent action to identify people who are struggling to pay for heat and light.

These are led by nPower where the average debt on an electricity bill before the company steps in to set up a repayment plan is £907. The figure on gas at the firm is £831. However debt does top £1,000 with some smaller providers.

Rachel Fletcher, from Ofgem, said: ‘When suppliers let big debts accrue, it’s a sign that they’re not spotting debt or stepping in early enough to help customers who are struggling to pay bills. Under our new rules, suppliers must identify vulnerable consumers and show they’ve taken extra action to treat them fairly.’

Npower said: ‘We are committed to helping our most vulnerable customers and we go above and beyond our regulatory obligations to provide assistance to those who need it most.’