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Updated, 23.17
ELECTRICITY COMPANIES will be alerted if customers switching accounts from other providers have outstanding arrears, under new rules being drawn up by the Commission for Energy Regulation (CER).
The new rules are intended to stop consumers from switching between different service providers in attempts to evade outstanding bills – and, it is hoped, will encourage customers to confront their arrears instead of drowning in debt.
The proposals are based on a similar scheme already in place in the UK, where ‘debt blocking’ kicks in above a certain level – meaning that while customers with a certain amount of arrears can move between providers, those with significant levels of unpaid bills cannot escape their obligations.
Announcing its proposals, the CER said it was concerned that in “the current difficult economic climate, customer and industry debt levels are being exacerbated by some customers’ changing supplier in order to avoid paying their arrears or to avoid a pending disconnection.
“Debt hopping, and indeed the high general level of debt, is acknowledged as a serious issue for the industry raising costs for suppliers and ultimately for all consumers.”
The proposals were welcomed by Bord Gáis, which said they were a “fair solution” that would stop customers seeing their debts spiral out of control.
A company spokesman said Bord Gáis was disappointed, however, that there was no ‘comprehensive solution’ allowing suppliers to take more active steps in helping customers to avoid falling into debt.
“The issue of customer debt is a growing problem and Bord Gáis is committed to working with customers who are in difficulties by offering pay-a-you-go plans and meters,” he said.
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I agree know loads of people who switch all the time and just laugh at the debt they leave behind, that increases the price for everyone else????
Indeed, another trick being to move accounts from one name to another, using disposable bank accounts. (Many suppliers charge a hefty deposit, if you don’t set up direct debit, in an attempt to counteract “apartment hopping”.
It is, shall we say, a practise that has been taken up by many diverse groupings.
I returned to Bord Gais after 4 disastrous months with Airtricity. I had to pay a €400 deposit along with the direct debit which is an absolute ridiculous amount of money by anyone’s standards. It used to be €200 deposit with DD. I have no bad credit rating and had always prepaid my previous Bord Gais bills throughout the month but I was still told I had to pay €400 deposit. I wonder how they’re getting on attracting new customers
I moved to Bord Gais in the beginning of them supplying electicity, no deposit ! I don’t agree with depsoits for basic services, €400 is a massive amount for a deposit, to hold that money and receive bank interest on it is wrong, 400 x 10,000 customers = 4 million Euro they are collecting the bank interest on ! grrrrrrr hate these money grabbing, profit before everything companies !
I’m rather surprised.
When I moved electricity providers (twice!), a “closing” meter reading was used to calculate my outstanding bill. I had to pay for the electricity regardless of company, and the new company started with the same reading as their “opening” figure.
How, therefore, do people manage to change providers without paying the bill, as is alleged above? The MPRN (meter number) remains the same and is the unique identifier. I don’t understand the scam.
The “scam” is that people leave a company and bin the bill from the previous company and ignore the demands for payment of the closing balance knowing they can’t be cut off. This isn’t so easy if you’re on direct debit…
But since most gas and electricity users pay over a counter some will get away with it. It’s a very small minority of customers and it is probably blown out of proportion – 60% of electricity users haven’t bothered changing after 2 years and discounts of 14%.
Eh, the decision paper clearly does the exact opposite of this report.
The consumer can still switch unimpeded to a new supplier. However a “flag” will be shown to the company accepting that customer warning that a debt of €250 or more is owed to the company losing the customer for more than 42 days.
That’s it. No change; it just warns the new supplier that they’ve a dodgy payer.
As a result of which the new supplier may well tell said customer to take a hike.
I’d imagine in these times, they’d be wary of taking on someone with a poor history.
To say that appartment hopping happens, doesn’t hold much weight at all. To say people will have a months rent deposit available just so they don’t have to pay the electricity bill, and they move out. Seems a bit overkill.
While I agree with the matter in principal I cannot understand why CER won’t get something for consumers in return? I don’t see them as an impartial regulator
It isn’t any surprise that people who are in debt and need to confront arrears. Maybe in some cases, unemployed people, who are now spending more time at home because they are not working, use up more electricity.
To say these people should confront their arrears is just silly. Arrears is a lot more than what the bill actually costs. I’m sure they could confront the arrears if they had jobs to pay these arrears and surely also, if they were working they would pay the bill on time.
Also, for every missed DD from AIB there is a charge of €10.
The story relates to customers of electricity companies, but doesn’t specify the reasons why these people are in arrears. Maybe because they don’t have jobs, like many in this country, and the many more that join them each week.
I keeping hearing of so many people moving to airtricty in hope of lower bills only to end up in huge debt
Thanks, was considering a move, will now stay where I am :)
Airtricity still overcharge me for units I haven’t even come close to on my meter. Even calling Airtricity(ESB meter reading service), an them logging the meter read as interim, it’s still less than their previous guessimate.
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