Ofgem investigates Utility Warehouse over energy supplier's treatment of customers in debt

Ofgem will focus on whether the big six challenger offered 'appropriate repayment options' to struggling customers

Profits at British Gas, which operates Centrica’s retail energy business, fell 71 per cent to £137m (EPA)

The energy regulator has launched an investigation into Utility Warehouse over how the supplier treats indebted customers.

Ofgem will focus on whether Utility Warehouse, which is a challenger to the big six suppliers, offered “appropriate repayment options” to customers who were struggling to pay their bills.

The regulator said its investigation would include whether the company complied with rules by doing enough to try and contact customers in or at risk of debt to establish manageable repayment plans based on their ability to pay.

It also includes whether they installed prepayment meters appropriately as a means of recovering debt from customers, particularly when they installed them under warrant.

The launch of the investigation does not imply Utility Warehouse has broken rules, Ofgem said.

Utility Warehouse is a mid-sized energy supplier that also offers mobile, landline and broadband. It claims to have more than 600,000 customers.

A spokesperson for Utility Warehouse said the company is “surprised and disappointed” that Ofgem has decided to launch a formal investigation into its processes.

“An independent audit of these processes late in 2017 gave an overall positive report with a number of best practice recommendations now having been fully implemented,” he said.

“We will, of course, work alongside Ofgem to ensure that this investigation is concluded,” the spokesperson added.

Utility Warehouse has become the latest challenger energy supplier to come under the regulator’s spotlight.

Ofgem is also investigating another challenger supplier, Iresa Energy, over its complaints handling process.

On Thursday, Ofgem alleged that two more suppliers, E and Economy Energy, breached competition law by colluding in order to avoid competing for the same pre-payment customers in 2016.

A spokesperson for Economy Energy said: “Economy Energy takes its compliance obligations very seriously and is disappointed by Ofgem’s announcement. The company is presently reviewing the statement of objections and proposes to submit a robust defence to Ofgem’s allegations through the proper channels in due course.”

E could not be reached for comment.