We welcome Ofgem’s proposal for a consumer standards framework. We continue to see energy suppliers failing to deliver for the financially vulnerable consumers. We agree that consumers face problems in the areas identified by Ofgem – contact ease and identification and support for those struggling.
The rules proposed in these areas look positive and should add to the current consumer protections contained in the licence conditions. We particularly welcome proposals to end the minimum payment requirement for consumers who fall into arrears. This will bring the sector more in line with best practice debt advice principles where individuals should only ever be required to pay what they can afford.
We would like to see some additional clarity in the following areas:
- Assessments of a consumer’s ability to pay should be conducted using the Single Financial Statement (SFS) (the Common Financial Tool (CFT) in Scotland) to ensure consistency across the sector and with debt advice. There should not be room for suppliers to argue that repayment plans are ‘suitable’ without evidence from an SFS form.
- There must be stronger rules around proportionate debt enforcement. We continue to see consumers in vulnerable circumstances facing inappropriate bailiff enforcement. Rules should make it clear that certain demographics should not be threatened with or face this kind of enforcement. We would also like to see a requirement for all bailiffs used by suppliers to be accredited by the Enforcement Conduct Board.
- Communication from firms to consumers facing difficulty must be carefully designed and worded. Ofgem should propose a test and learn approach to ensure suppliers are honing the content of their communications to maximise engagement.
- Referral mechanisms must be effective for consumers and support organisations. We welcome efforts to reduce wait times. Outcomes for customers struggling with debt would be aided by having separate lines for support organisations calling on behalf of clients.