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Microbusinesses need more support from Ofgem on debt-related issues, a principal energy retail policy manager at Citizens Advice has told Utility Week.
Last week, the energy regulator unveiled a series of measures designed to protect millions of microbusiness customers from “unscrupulous” energy brokers, as well as enabling smoother switching.
Measures included a requirement for suppliers to only work with brokers signed up to an alternative dispute resolution scheme.
In addition, a 14-day cooling off period for contracts is being introduced, as well as a ban on suppliers from requiring microbusinesses to provide notice of their intent to switch.
Alex Belsham-Harris, principal policy manager for energy retail markets at Citizens Advice, described the move as a positive step but said the consumer advocate was hoping for stronger protections regarding microbusiness debt.
“What we wanted from Ofgem was more clarity on support that businesses should get with debt,” he said. “For example, if you are a domestic customer then you get the right to a payment plan to pay off your debts in a more sustainable way. You don’t get that right if you are a microbusiness.
“Similarly you are protected from being disconnected. It’s almost unheard of that domestic customers are disconnected for debt but that can happen a lot sooner for microbusinesses. We don’t think the same rules should necessarily apply, because obviously the risks are different, but it is an area where we think there is detriment. We want Ofgem to look at it and think about how practices can be improved.”
Belsham-Harris added that Citizens Advice also wants to see Ofgem put in place rules around signposting to third party services for support on debt issues.
“One of the main things we found is people often only get in touch for debt issues quite late on in the process and at that point it’s very difficult for third party services like ours and Business Debt Line, which also do a lot work to support them, to help. We would want Ofgem at the least to put in rules around signposting to third party organisations for support”, he added.
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