Utility Warehouse ordered to pay £ 1.5million over customer debt problems

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The energy supplier has been fined by Ofgem for failing to treat some of its customers fairly and for failing to help those struggling with energy debt.

An investigation by the regulator found that Utility Warehouse customers were not routinely offered services such as debt repayment plans and energy efficiency advice. This has left some of its clients at a disadvantage and facing increased financial hardship.

Utility Warehouse accepts its failures and has agreed to donate £ 1.5million to Ofgem’s voluntary recourse fund which supports vulnerable customers and innovation in the energy sector.

The energy regulator was made aware of the failures of Utility Warehouse following an audit report in 2018. A formal investigation was subsequently opened which revealed that failures had taken place between 2013 and 2019.

Ofgem found that Utility Warehouse did not consistently offer to put domestic customers struggling to pay their energy bills on debt repayment plans or to allow payments to be taken directly from customer services. It also did not take into account customers’ ability to pay when calculating regular installments.

Customers did not always have the option of reimbursing their costs through the voluntary installation of a prepayment meter or energy efficiency advice on how to reduce their bills. In some cases, this has led to the unnecessary installation of prepayment meters under mandate.

During the investigation, Utility Warehouse also raised the fact that it submitted inaccurate Social Obligation Declaration (SOR) data to Ofgem between 2013 and 2019. This data allows Ofgem to examine the performance of suppliers. regarding their social obligations and compliance with licensing requirements. , challenge poor performance and inform policy decisions.

Cathryn Scott, Director of Application and Emerging Issues at Ofgem, said: “Energy providers have a responsibility to look after their customers, especially those in vulnerable situations. Between 2013 and 2019, Utility Warehouse failed to take the necessary steps to fairly treat some customers in difficulty with payments, depriving them of the ability to manage their energy debt and ongoing energy costs.

“While the unprecedented and unexpected rise in gas and electricity prices over the past few months has strained energy markets, we expect suppliers to continue to meet their obligations to licensing and treating people fairly, including providing support to vulnerable consumers. Where we see bad behavior, Ofgem will be ready to step in and take swift action. “

Justina Miltienyte, Energy Policy Expert at Uswitch.com, said: “Energy providers have an obligation to offer repayment plans to customers who go into debt. Ofgem fulfills its regulatory obligations by discovering the bad practices of suppliers.

“This payment should send a clear message to all suppliers that they must meet their obligations and systematically protect and support customers facing energy debt. Failure to offer debt repayment plans is unacceptable and, in this case, has likely left some clients at a serious disadvantage.

“Three million homes are entering the winter of 2021 with energy debt – a worrying half a million more than last year. This highlights the scale of the energy debt problem and the need for suppliers to do more.


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