Energy companies face fines over threatening debt collection letters

Ofgem said it would launch a wider review this autumn into debt collection methods and this would include its findings over compliance with Ability to Pay obligations, which could result in enforcement action such as fines.

The discovery of the threatening letters came after Ofgem asked for evidence on suppliers using letters that purported to be from external debt collection companies, when they were in fact from the supplier itself using different branding.

Ofgem said it had "concerns about the transparency" of some of the examples it had seen and that suppliers must clearly state the brand was linked to the supplier.

All of the major suppliers at some point have used alternative branding for debt collection but most stopped by July after public outcry over the "fake" collection agencies.

Only Npower of the Big Six still uses the alternative branding, called Collections Direct, but Ofgem said the supplier was "taking action to make the connection between Collections Direct and npower much clearer".

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