Bulb may start charging interest for missed payments

Energy retailer Bulb has announced it could start charging its customers interest if they miss or are late with payments.

As part of an update to the supplier’s terms and conditions, customers who are in debt and do not communicate with Bulb may be charged interest. Similarly, those who repeatedly lose pre-pay meter keys and cards could also face charges.

The company’s proposals will bring it in-line with other suppliers, with many having it as an option in their terms and conditions.

Two missed payments in a row will result in an increased charge if customers have not contacted the supplier, in order to encourage them to do so. This fee will be waived if a customer gets in contact and Bulb can help them make changes to their payments. The updates will also give Bulb the flexibility to introduce interest payments if needed, although no final decision has been made as to when these will come into effect.

A spokesperson for the London-based supplier told Utility Week it was making the changes to keep prices low for its customers.

“We know this is a difficult time for our customers, which is why we’ve also introduced new services to offer more support. We’re committed to transparency and fairness in our pricing, and to helping more households lower their energy bills and carbon emissions”, they added.

The new terms were outlined in a blog post by chief executive Hayden Wood, who said: “We’ll always communicate clearly with members and try to help them if they fall into debt. If we need to, we’ll be able to charge for some debt recovery costs so we can keep prices low for all our members. This could include charging interest on late payments, missed payment fees, debt collection fees, pre-pay meter installation fees and legal fees.

“We’ve also made it clearer that we expect members to not be in debt and we may ask you for a security deposit if you are in debt.”

Furthermore, Wood said Bulb was introducing the option for new charges for things that “could have been avoided”.

“This includes things like charges for losing pre-pay meter keys and cards, fees for booking an engineer and not letting them in and fees for replacing a working smart meter with a traditional meter. Accidents happen, so we’ve built some leeway into them for you. For example, we won’t charge you the first time you lose a card or key”, he added.

Wood said the company fully supported the principles for managing energy debt caused by Covid-19, which were agreed between the industry and government several months ago.

“We will introduce our new terms carefully over the summer and will always consider members’ ability to pay when we apply them. We want to keep prices low so members don’t get into debt in the first place because they’re overpaying for their energy.”

In addition to the principles agreed with government, regulator Ofgem recently announced up to £350 million worth of network charges would be deferred to ease the financial burden on suppliers.

In response to the changes Gillian Cooper, head of energy policy at Citizens Advice, said: “Many people will be struggling to pay their bills as a result of coronavirus. Bulb, along with all other energy suppliers, signed up to principles that give more support for customers who need it.

“It’s disappointing to see these changes at this time and that their email to customers only emphasised the penalties they might incur if they struggle to pay, rather than the extra help on offer.”

Meanwhile Matt Cole, chair of the Fuel Bank Foundation charity, who previously served as Npower’s head of policy and customer vulnerability, said: “What’s essential to remember is that customers in crisis or in a really vulnerable situation may not feel able (or may not be physically able) to contact Bulb.

“The changes being made mustn’t be applied in a blanket way, but should be applied when Bulb can see a customer won’t suffer a detriment as a result of the charge, or that the issue that resulted in the charge doesn’t relate to the customer’s vulnerability.

“It’s also important that charges can be rewound if needed.  Ofgem has done some good work in recent years thinking about how the most vulnerable are protected and it’s important that these changes don’t undermine this.”