Ofgem relaxes conditions for prepay customers in debt to switch supplier


London, U.K. — (METERING.COM) — September 26, 2012 – Britain’s regulator Ofgem has relaxed the debt threshold and introduced other measures to enable more prepayment customers in debt to switch supplier.

The threshold for the amount of debt that can be switched between suppliers increases from £200 to £500. Other steps that will be taken include increasing awareness of the ability to switch and improving the processes through which customers switch.

The measures were agreed with suppliers and the top six suppliers – British Gas, EDF, E.ON, SSE, Scottish Power and npower – have voluntarily agreed with Ofgem to increase the debt limit from November 1. This is expected to help tens of thousands of people who were previously outside of the debt threshold.

According to an Ofgem statement these measures are part of efforts to encourage suppliers to proactively resolve debt issues and use disconnection only as a last resort. Annual figures for 2011 show a significant decrease in the number of people being disconnected from their energy supply (a reduction of 54 percent for electricity and 59 percent for gas).
There has also been an increase in the amount of time given for customers to repay debts.

However, energy debt remains a problem, with more than 315,000 electricity and 320,000 gas prepayment meter customers in debt in 2011. The average level of debt being repaid stands at £357 for electricity down from £360 in 2010 and £371 for gas, up from £339 in 2010.