Wednesday, May 18, 2022
HomeBusinessEnergy firms send in debt collectors... to homes that owe nothing 

Energy firms send in debt collectors… to homes that owe nothing 


As households brace for a huge rise in energy bills, many will be counting on their supplier to give them some breathing space.

But Money Mail has found that, instead, power firms are unleashing debt collectors over bills which have often been issued in error.

Customers of one firm have had unexpected demands after the supplier sold debts to a third party.

Shock tactics: Power firms are instead unleashing heavy-handed debt collectors over bills that have often been issued in error

Shock tactics: Power firms are instead unleashing heavy-handed debt collectors over bills that have often been issued in error

The debt-purchasing company is represented by a law firm which two watchdogs have received complaints about.

Some debt collectors offer large discounts if households agree to pay up quickly. But experts say this could lead to customers handing over cash without first ensuring the demands are correct, for fear any delay could result in a bigger bill – and complaints about inaccurate bills are at a record high.

Last month, energy watchdog Ofgem was forced to intervene after bailiffs acting for Scottish Power were filmed breaking into a woman’s flat to collect cash she did not even owe.

Most suppliers paused debt collection at the height of the pandemic in 2020 — but that reprieve has ended.

Experts fear incorrect demands will pile anxiety on to customers already worried about soaring energy costs — the average annual bill is set to hit £2,000 in April. They say firms facing cash-flow problems may ramp up debt collection.

Jules James, 56, is being hounded for £6,306 by EDF Energy — despite never being a customer. She has had three letters from debt collector LCS.

It claims the eye-watering sum covers two-weeks in August for a two-bed flat she rents out but never occupied.

He sent proof he did not live at the property at the time and was with another supplier. But this was dismissed as ‘not relevant’.

One letter threatened legal action, saying this could ‘hinder your ability to obtain future credit or a mortgage’ if successful, and added ‘litigation costs are usually paid by the debtor’.

LCS later sent an ‘offer of settlement’, and a 25 per cent discount if the debt was paid in ten days.

Jules, who runs a branding agency, says: ‘It is bullying and it is harassment.’

The average annual bill now expected to hit £2,000 in April and experts warn that with energy firms facing cash-flow issues, more could ramp up debt collection activity

The average annual bill now expected to hit £2,000 in April and experts warn that with energy firms facing cash-flow issues, more could ramp up debt collection activity

Retired local government officer Neil Hayward was also chased by LCS for £463. He sent proof he did not live at the property at the time and was with another supplier. But this was dismissed as ‘not relevant’.

LCS also asked Neil, 57, for details of the people who sold him the home, but he refused. The matter was resolved when Neil complained to EDF and LCS. He was offered £300 as a goodwill gesture.

He says: ‘How many people just pay to get these firms off their backs?’ Last month, specialist debt collection law firm BW Legal sent out letters claiming households had outstanding debts with E.On dating back years.

Yet comments posted on review website Trustpilot suggest many had settled their balance or were never with E.on.

Watchdogs the Information Commissioner’s Office and Solicitors Regulation Authority are making enquiries after receiving complaints about the firm’ .

One reader says he opened an envelope with three letters from E.ON, debt collection agency PRAC Financial and BW Legal claiming that he owed £109.45.

Addressed to ‘the occupier’ it referred to a debt accrued between July 2017 and January 2018. He was offered 65 per cent off, reducing the debt to £38.31, if paid within a month.

Experts are concerned that incorrect demands will be particularly upsetting for households already anxious about the soaring cost of energy

Experts are concerned that incorrect demands will be particularly upsetting for households already anxious about the soaring cost of energy

But the telecoms engineer, 35, says he had settled his balance after switching supplier almost six months ago.

In some cases, debt collectors are doorstepping customers without warning.

Last summer, E.ON representatives turned up twice at a 93-year-old widow’s house claiming she owed £1,120, plus £55 for the collection.

Despite proving she had paid her bills she was threatened with legal action leaving her panicked and distressed. E.on eventually admitted the bill was an error.

Martyn James, of complaints site Resolver, says: ‘Energy firms are deeply concerned about rising prices. In the absence of any meaningful solution from the Government, it’s likely some of them will look at other ways they can recoup their losses.’

Jane Tully, of Money Advice Trust, says: ‘Poor debt collection practices can harm people’s financial and mental wellbeing. There is no place for intimidating and threatening language.’

An Ofgem spokesman says: ‘We are reviewing how suppliers provide assistance to customers in debt or payment difficulty.’

E.on says that it legitimately gave property details to BW Legal.

BW Legal says its clients identify the persons responsible for debts it has bought. It says its letters explain that if recipients believe they are not responsible ‘they simply need to contact us and we will resolve this’.

BW Legal questions the credibility of the Trustpilot reviews and says it works proactively with customers who raise concerns.

A spokesman adds that the letters are ‘not intimidating’.

EDF Energy says it contacted Jules as the leaseholder and is trying to discover who was responsible for the bills.

It admits Neil was contacted by mistake by LCS after it passed on the address.

Scottish Power says it paid compensation after the bailiff broke into the female customer’s home.

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