‘Debt hopping’ to force energy bills up

A massive surge in “debt hopping” by many householders switching between energy providers could lead to consumers facing higher gas and electricity bills.

The head of Bord Gáis, John Mullins, delivered the warning after confirming customers who switched from Bord Gáis Energy to other suppliers left the company with €17m in unpaid bills.

“Debt hopping is a serious issuing facing the energy industry, as the non-payment of closed accounts is an unfair practice which ultimately leads to higher costs for all customers,” said Mr Mullins.

“Although these accounts are closed, we will continue to seek payment for the outstanding debts.”

Debt hopping — where a customer moves from one supplier to another without settling their final bill — has increased over the past three years following the introduction of competition and the entry of new suppliers into the residential gas and electricity markets.

At the end of the first quarter of this year, Bord Gáis Energy disclosed that it was owed about €17m on closed accounts, which include customers who have moved from Bord Gáis to another supplier without settling their bill.

The Commission for Energy Regulation has developed a debt-flagging system which is activated during the change-of-supplier process.

It applies to all non-daily metered customers in the gas market, and all customers, with the exception of large energy users, in the electricity market.

It is governed by strict data protection rules, agreed debt levels, and outstanding debt time periods, which allow the energy supplier who is losing a customer to inform the potential new supplier of any outstanding debts the customer may have.

The potential supplier can then use this information to make a call on whether or not to take the customer on.

If the supplier agrees to proceed with the switch, it can impose additionalconditions such as a higher security deposit.

The system was introduced late last year, a CER spokesman said, and is being continually monitored.

Meanwhile, it emerged that Mr Mullins intervened personally to investigate the case of a woman who contacted a radio station after Bord Gáis disconnected her electricity supply.

The mother of three, who is living on welfare benefits, accepted her account was in arrears but revealed that her electricity supply was cut off despite her agreeing a repayment plan and making payments.

Mr Mullins investigated the case and accepted the company got it wrong.

“We accept, in this particular instance, we should have been more flexible,” said a company spokeswoman.

“We have done our best to resolve this issue to the customer’s satisfaction and we reconnected the account.

“It is important to stress that this was a one-off incident and our credit collections process is as flexible and fair as possible.”

The latest figures show the number of Bord Gáis Energy customers in arrears has soared. At the end of the first quarter of this year, 9% of its customers — about 75,000 accounts — were in arrears.

The company has, since Jan 2011, agreed 110,000 repayment plans. compared to 31,500 in 2010 and has installed 25,000 pay-as-you-go meters compared with 1,250 in 2010.

Disconnection was an “absolute last resort”, said the spokeswoman.


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