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REGULATION UPDATE | Ofgem rules for debt – Stronger protections for customers this winter

Written by

Jolyon Canlin, Regulations Manager

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Ofgem will be introducing new licence conditions that come into effect on 15th December 2020 aimed at giving greater protections for customers who are struggling with their energy bills this winter.

This follows a consultation in June 2020 on self-disconnection and self-rationing which has informed these latest decisions. Suppliers will be required to offer emergency credit to prepayment customers who are struggling to top up their meters. This may be due to not being able to afford to top up at that time, mobility issues or perhaps self-isolation due to Covid-19.

In addition to this, suppliers will have to offer additional prepayment credit to households in vulnerable circumstances to enable more time to pay. These requirements are aimed at reducing the number of prepayment customers who go without energy or ‘self-disconnect’ after running out of credit.

While the above seems quite clear and suppliers should be able to embed these rule changes into their business processes with a degree of certainty, there is a further rule change which is open to much broader interpretation. This change will require suppliers to put debt customers on ‘realistic and sustainable' payment plans. Although this is very subjective it will require suppliers to have appropriate credit management policies in place which will involve proactive customer contact and repayment plans based on ability to pay. For many suppliers this will just be a ‘BAU’ approach as plans and processes are in place. However, by making it a formal requirement, Ofgem are creating a catalyst for those smaller suppliers for whom the plans have not yet been fully mobilised.

ENSEK will be supporting customers through these new changes. If you would like to find out how, please get in touch.

Need advice or guidance?

If you want to find out more from a regulatory point of view please contact Jolyon Canlin, ENSEK Regulations and Compliance Manager or alternatively please get in touch to learn how ENSEK will be supporting these changes.

Get in touch

If you'd like to find out more information on how ENSEK will be supporting these changes, please get in touch