Help for creditors following Ofgem announcement

Expert debt recovery lawyers have commented following Ofgem’s recent announcement that energy companies can go ahead and start pursuing unpaid energy bills, after the hiatus brought about by the immediate crisis of the coronavirus pandemic.

However, this does not mean that companies can simply demand payment from their customers. In making the announcement Ofgem have made it clear that suppliers are expected to treat customers equitably and consider their ability to pay. Ofgem have warned suppliers who take aggressive or unfair action that they may be subject to sanctions.

Stuart Hoysted, Technical Director at national law firm Clarke Willmott LLP and expert in debt recovery, says while the announcement will be welcomed by energy companies, the process must be handled in the right way.

“It is clearly important for both creditors and customers that the debts are not allowed to continue to grow. It is therefore not surprising that Ofgem have taken this stance,” said Stuart.

“Customers need to try to pay their debts. Leave it too long and the debt can be perceived as an insurmountable mountain – the larger the debt, the harder it is to resolve. The burden becomes yet another worry for families and individuals already struggling.”

On the other side of the coin, creditors and suppliers need the cashflow – they have a workforce to pay as well as the infrastructure and all the associated costs of running their business. Some creditor firms are suffering from the double impact of a huge increase of customers with debt, whilst handling the challenges of a socially distancing and perhaps even reduced workforce.

“In the current Covid-19 world the importance of creditors, from all industries, taking a fair and ethical approach to recovery efforts in accordance with the Ofgem guidance becomes paramount. Creditors should be actively engaging with customers because allowing the debt to continue to grow is detrimental to both,” continued Stuart.

“We have seen some creditors looking to outsource some or all their collection activities. If so, it is important to ensure that a collaborative working strategy is agreed with the chosen partner so that a correct and fair balance is achieved.

“Where outsourcing, choosing to work with properly regulated agents or solicitors who have a shared vision and are accountable, is more important than ever. At Clarke Willmott we understand the importance of working with customers to try and reach an early and amicable solution. This may be a repayment plan over several months for example, which may not be ideal but may be preferable in the current climate to incurring the outlay associated with court proceedings.

“It is also important to be able to move quickly to change strategies and update correspondence, to reflect the changing impact that Covid-19 has and will continue to have.”

Clarke Willmott is a national law firm with offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.

Clarke Willmott’s debt recovery team are experts in helping businesses develop tailored debt recovery strategies and aim to help businesses find sustainable, sensitive solutions.

For information on how they can help you during this difficult time, contact Stuart Hoysted on 0345 209 1731 or visit www.clarkewillmott.com