A very real need for help
Highlighting the challenge people face is Citizens Advice, which recently released data on the numbers of people coming to them for help with crisis support, energy problems, and not having enough money to make ends meet. The data was heavily focussed on the impact prepayment meters are having on customers.
The prepayment meter is designed to allow customers to control their utility spending, and if in debt, allow them to manage the repayment of that debt by allocating a percentage of the top-up to the repayment.
Utility companies have also set up several schemes to provide customers with emergency top-ups to ensure essential supplies are not cut off and other charitable schemes are available to those that need help.
However, it is becoming ever more evident that such schemes are not going far enough, and the Citizen Advice statistics suggest the problem is only going to worsen when the current energy price cap is increased to £3,000 in April 2023.
The data from Citizens Advice shows that in 2022, 27,521 people contacted them as they were unable to top up their prepayment meter, this is more than in the previous 10 years combined.
More than the usual vulnerable
For the month of December 2022, the number of people contacting them reached 5190, compared to 8,366 in the whole of 2021.
To add to the challenges the utility companies are facing, in November 2022 Ofgem highlighted that 17 firms had ‘severe weaknesses’ in how they were supporting their most vulnerable customers. And with an Ofgem review into the checks and balances companies use to decide to put someone on a prepayment meter, these weaknesses could now trigger legal action by both government and regulator.
Whilst many of the people contacting Citizens Advice will already be known to the utility companies and be on their vulnerable customer registers, the data shows that a growing number of customers that might not be considered vulnerable are also facing financial difficulties. In 2022, 152,982 people contacted Citizens Advice for the first time, compared with 106,807 in 2021.
The data also shows that 37.9% of the people contacting Citizens Advice were single people, with no children, and that 25.4% were aged between 35-44. Of further interest is that the number of employed people referred for crisis support has more than doubled in the last two years to 23,888.
For some these statistics may go against the commonly held belief of who is on a prepayment meter and who is being cut off.
The consequence for these people is that their heating and/or electricity is being cut off until they can top up the meters. The impact of this cannot be underestimated and can result in people’s debt situation spiraling out of control, with even the most basic things that many of us take for granted becoming impossible.
How to manage the situation fairly
While the criticism in the media of how people are being switched to prepayment meters increases, the question of what the alternative is does not appear to have been answered with any certainty. Very few, if any businesses would knowingly allow a customer to continue to use their product (in this case gas and electric) when they know that a debt is being accrued and is unlikely to be paid.
In the financial services industry, the breathing space initiative was introduced for those struggling to keep up with loan repayments. Could we see a similar scheme adopted by utility providers to help manage customer debts?
However, given the vital nature of the services provided here, the responsibility is on energy companies to provide customers with support while still providing gas and electricity. Several options for how this can be managed have been suggested in recent weeks including social tariffs for vulnerable households, but the fact is that customers need the help today.
Some energy firms are in difficulties too
In December 2022, the Utilita boss, Bill Bullen, told Good Morning Britain that he could not afford to employ more customer service staff due to his firm losing circa £30m per year and, whilst it is unlikely there will be much sympathy for energy companies, the reality is that in 2021, 28 energy firms collapsed. Firms therefore need to balance the need to support their customers, with also ensuring they too can keep the lights on.
The online forums show that in many cases, customers’ biggest issue with the energy companies is that they cannot get help when they need it. It is taking too long to get through to helplines, emails are going unanswered, and complaints are taking too long to be investigated.
The areas of achievable development for energy providers
Solutions to these customer service-related issues are fully within the energy firms’ abilities to resolve through reviewing internal processes and procedures. Below are some of the examples of actions that Energy companies with limited budgets can take to deliver improved service;
- Training and retraining for current front-line staff and increasing their level of decision-making autonomy on complaint resolution
- Reviewing how existing resource is used and redeploying if appropriate to deliver more pressing priorities
- Increasing front-line staff on a temporary basis while long-term plans are put in place to deliver future cost savings
- Re-examining approaches to identifying and supporting vulnerable customers
- Adjusting processes and customer journeys to suit changing needs and demand
How Equiniti can help
Equiniti is well placed to help energy firms with our proven track record in dealing with vulnerable customers, customer journeys, complaints, and general customer service queries. We have over 20 years of experience in providing contingent resource, providing a cost-effective solution at times of high demand and transition, which supports and compliments your existing teams.
Our award-winning complaints and feedback management system, Charter MMX, and our Complaint Insight service, allow firms to manage their complaints efficiently by automating many of the manual tasks associated with complaints and feedback management. With a suite of comprehensive MI, firms can also complete real-time root cause analysis and implement learning opportunities.