Energy suppliers must do more to help customers who are slipping into debt before the problem becomes too severe, Ofgem warned today.
New research from the industry watchdog revealed customers were building up on average over £600 in unpaid bills on their gas and electricity accounts before suppliers stepped in to help them manage paying it back.
In its annual report on vulnerable customers, Ofgem found Npower, Utility Warehouse, Ecotricity, iSupplyEnergy, First Utility and Spark Energy let customers build up more than £800 of debt on average before they start paying it off.
“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," said Rachel Fletcher, Ofgem’s senior partner for consumers and competition.
"We want industry to demonstrate that it is identifying and supporting these customers in a timely way. We will be monitoring suppliers to make sure they make long-term improvements on bringing down debt."
The regulator has introduced a new rule for suppliers to identify vulnerable customers and take extra action to support them along with recently announced plans to extend its safeguard tariff for prepayment customers to around 1m vulnerable households this winter.
The government has also published draft legislation to cap energy prices until at least 2020 in an effort to reduce bills for millions of households, but that is unlikely to come into effect this winter.