Utilities don't give enough power to the people, says CAB service

PRESS RELEASE

Too many people are still getting a raw deal from power companies, Scotland’s Citizens Advice Bureaux will warn politicians today [Wednesday, January 9th].

Inaccurate bills, harsh debt recovery practices, pre-payment meters that charge the poorest customers more, and an inability to get through to power companies to resolve complaints, are problems being reported to CAB offices by anxious clients.

“Problems with utilities companies are now the fastest growing area of enquiry for the Scottish CAB service,” said Kaliani Lyle, chief executive of umbrella body Citizens Advice Scotland.

“Last year we dealt with nearly 13,000 new enquiries, a 38 per cent rise on the year before.  Whilst this is still a small proportion of our overall enquiries, it causes significant problems to vulnerable clients, particularly since over half of these concern debt.”

An Early Day Motion based on the findings has been lodged today by Katy Clark MP for North Ayrshire and Arran.  Both the briefing sheet and the Early Day Motion highlight four key areas of concern: billing errors, debt recovery, pre-payment meters and complaints handling. 

“Bills based on estimated readings can result in sizeable debts accruing, causing further problems for clients,” said Ms Lyle. “Yet, when they contact companies, clients are often simply told to ignore letters threatening disconnection as ‘computer error’.”

One CAB client was under-charged for gas over three years as the company had erroneously used metric not imperial measurements; it took six months to get an accurate bill (for £800) and the company are now demanding £227 per month.

CAS insists that repayment levels for arrears are frequently excessive in relation to the amount owed and the client’s income.  “Direct debits are altered without informing clients and it can be very difficult to get the levels changed,” said Ms Lyle. “The amount owed is often wrong, due to billing errors or maladministration.  Clients have also been pursued, even disconnected, for the arrears of previous owners or tenants.”  A CAB client with two children was sent a bill for £4,551; the company threatened disconnection but would not speak to her on the phone as the account was in her ex-partner’s name.

CAS is also very critical of pre-payment meters.  Often foisted on the poorest customers, these usually have the most expensive tariff.    “The price difference compared to paying by direct debit increased from £70 in 2004 to £124 in 2007, and compared to paying online by an average £195 per year,” pointed out Ms Lyle.  “Yet despite paying more, clients still encounter faulty meters and delays in getting them fixed.

“Three power companies also continue the iniquitous practice of back-charging after a price rise.  We think the onus should be on them to recalibrate meters quickly.  ‘Smart meters’ would more accurately gauge usage and cost, and can be switched from credit to pre-payment or recalibrated remotely.”

Both clients and CAB advisers are frequently exasperated by the length of time it takes to get through to power companies - and problems are rarely resolved in one phone call.  Direct telephone lines for advisers have helped, says CAS, but these are of variable quality and not universal.

CAS fears these problems will be compounded by proposed changes to the energy complaints-handling process.  From October 2008, consumers will first need to phone Consumer Direct for basic advice and information, although problems not resolved within three months can then be taken to an ombudsman.  Vulnerable customers - a term yet to be defined - will be given assistance through the newly expanded Consumer Council.

Ms Lyle warned: “We anticipate these changes will result in confusion and a further sharp rise in the number of people coming to the CAB service for help with power companies.”

Katy Clark, MP for North Ayrshire and Arran and sponsor of the Early Day Motion said “Power companies appear to be better at raising prices than raising their standards of service.  Dramatic improvements in complaints handling are needed across the board, but particularly when dealing with vulnerable customers.”

In its briefing sheet, CAS is calling on power companies to:

• Significantly reduce billing errors and improve their complaint handling
• Provide direct telephone numbers for CAB offices to speed up resolution of complaints
• End back-charging for token pre-payment meters

CAS is calling on the government to:

• Fulfil the Prime Minister’s commitment to encourage roll out of smart meters to all households within ten years
• Ensure that all customers can easily access effective complaints resolution through the new Consumer Council
• Increase pressure on the regulator Ofgem and the industry to improve complaints handling

The Early Day Motion reads:

That this House welcomes the publication of Citizens Advice Scotland's latest briefing on problems with gas and electricity suppliers; is concerned that power companies continue to cause misery for CAB clients in Scotland through inaccurate, confusing and contradictory bills, mistaken or harsh debt recovery, delays in fixing or recalibrating pre-payment meters and lengthy delays and frustration in contacting companies to resolve complaints; calls on the Government to increase pressure on Ofgem and the industry to improve complaints handling and intervene if there is no improvement; and ensure that all CAB clients are considered vulnerable and so can easily access effective complaints resolution through the new Consumer Council.

Notes for News Editors

1. Each CAB is an independent charity, run by a committee of local people, and responsible for raising its own funding.
2. Around 80 per cent of CAB workers are trained volunteers – if you’d like to help your local community for just a few hours each week, contact your local bureau manager, or volunteer through the CAS website – www.cas.org.uk
3. The first bureaux in Scotland were established in 1939 as a wartime information service.  There are now 76 CAB offices across Scotland, which operate from over 200 service points, and which form the country’s largest independent advice network.
4. CAB advice services aim to be freely available and accessible to everyone in the community.
5. Consumer debt is now the single biggest issue that CABx deal with.  Last year, CABx in Scotland dealt with debt totalling over £211m.
6. Images and logos of the CAB service are available from the CAS press and communications officer (see contact above).
7. Practical and up-to-date information is available online from Adviceguide (www.adviceguide.org.uk), including factsheets you can print off.