Via Yahoo Finance

Energy suppliers have been given the green light to start collecting money owed by customers by the industry watchdog.

In a letter to suppliers, Ofgem said that while many customers were still struggling to pay bills because of the crisis, it understood that firms could not halt debt collection indefinitely.

“We recognise that suppliers cannot extend unlimited credit to customers and we anticipate suppliers will begin to restart debt management activities that may have been paused during the immediate crisis,” the regulator said.

But in a warning to suppliers, Ofgem said any debt management practices had to take into account customers’ circumstances and ability to pay.

“We will not tolerate sharp practice or aggressive debt collection,” the regulator warned in its letter, adding that suppliers may face action this was the case.

Ofgem has moved to protect vulnerable customers as coronavirus ravaged the economy and raised the risk of some consumers having gas and electricity cut off.

As the unemployment rate soared in April, the energy regulator told firms it did “not expect suppliers to be disconnecting domestic customers because of debt”.

Many energy suppliers had voluntarily stopped collecting debts as they braced for a wave of late payments from customers unable to pay their utility bills.

Energy companies typically employ a wide range of debt collection tactics, including hiring specialist debt recovery firms and bailiffs.

Industry sources say that suppliers have suspended much of this activity as the Government tells firms to give their customers breathing space. Many are offering customers payment holidays and debt plans based on their individual needs.

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“Now, more than ever, it is also important that suppliers highlight the support available to their customers, ensure they are signposting to third-party advice and support where appropriate, as well as signposting to tariffs that may better meet a customer’s needs and circumstances,” Ofgem added in its letter.