Debt to energy company - they won't accept suggested payment.

[PunishmentRoundupWithJoon]

I have a friend who is going through some tough financial times (relationship breakup, etc) and she's in debt to her energy company. It's just one large bill that, due to a cock up by her energy company, she's unable to pay.

She's done everything she's been advised to do, spoken to Stepchange and another advice agency and used their template letter to offer a token payment to her energy company (forget who she's with) . They turned down her offer and said they can only accept £50 per month. She obviously can't afford this, as her budget attests.

Can anyone advise her on what to do next? She's really worrying about this and was led to believe by Stepchange that it was unlikely that the token payment would be refused, if she was upfront about her financial situation.

Thanks in advance.

Is the £50 in addition to her covering her usage going forward? Is she now able to afford her bills and it's just the debt to pay off? How much debt is there?

She needs to ring them and speak to them. The key phrase to use is "I cant afford that it will put me in financial hardship" but ultimately there is only so low they can go and if she still says no to their lowest offer the only option is to have prepayment meters fitted.

Heating is a priority debt (not sure about arrears though), is this payment coming above other bills?

Is this £50.00 on top of her actual usage?

I was once in this situation and found that the ‘normal’ staff couldn’t accept less then certain amounts. I sent an email saying all I can afford is my current usage plus ‘X’ amount. I would pay this by standing order as they wouldn’t agree the direct debit amount. If they needed to continue recovery procedures then fine but this is all I could pay.

Eventually it went far enough for someone to see sense and they would put that payment plan in place, this would then happen again every 3-6 months as the end of the current ‘arrangement’. Then I’d repeat the above.

They would threaten with the prepayment meters but they need court approval to do this without your approval. They never did this as I had paperwork to prove I was trying to clear the debt just not at the rate they wanted.

What error did the energy company make that has led to this situation?

It's unclear if she has a case against them demanding it if they caused the issue? It would seem they're not accepting responsibility if she's already discussed this?
They may put in a prepay meter. I've not had debt with energy but with bank, they have to put you on a payment plan that you can afford. You do a form and just put you have no debts other than that but virtually no income and they should give you a plan that's affordable just about.
If you say you've loads of other debt they won't be as lenient.

What energy company is it? (My money is on EDF or OVO as they seem to be unable to update bills properly).

Thanks for your replies, am going to ask her some questions and will be back soon.

@moppety - the £50 is just to cover the debt. The energy company said they can ringfence the debt so that the £50 will go just towards the debt and she'll carry on paying her bills as usual, which is quarterly, in receipt of bill, in cash. Yes, she can afford her bills as She puts enough away to cover them.

It's a long story as to how the debt happened, but the energy company was at fault and the ombudsman involved.

@BloodyAdultDC - yes, it's a priority debt. She has no other debt (have seem her budget) and has told the energy company that, going forward, she'll be paying as usual.

@FawnFrenchieMum - thank you (and sorry to hear you were in that situation too) - I'll suggest this to her. She's actually in touch with a named individual at the company, so the advice she's being given is from someone who knows what's what (you'd hope!) and is consistent.

@TheFlis - it started with a meter change due to a gas leak. Then them reversing 18 months worth of bills (including electric though the electric meter was unchanged!) and being unable to provide her with an up to date, correct bill for months. Complaint went nowhere and ombudsman involved. She says she accepted the recommendations and the solution but the energy company still failed to provide bill for ages.

It was the last thing she needed with the relationship breakup and other issues. Hence me trying to help her now as she's all for giving up.

If the ombudsman are involved I would also be asking them to intervene with the repayment.
Honestly, I’d tell her to get the account details and start making the repayments, if it is escalated she is showing willing to make the repayments a court is unlikely to rule in the favour of the company.

Then them reversing 18 months worth of bills (including electric though the electric meter was unchanged!)
Does that mean they paid her money back? Can she not go back to the ombudsman?

@FawnFrenchieMum - the ombudsman isn't involved in this as it's classed as a different issue. They were failing to provide an up to date accurate bill and dragging their feet so she reported them to the ombudsman. The case was resolved and she's now left with this debt that she's struggling with.

The ombudsman wouldn't take this on as a new case as it's to do with payment arrangements and they would say that the energy company is doing what it's supposed to, but suggesting a payment arrangement,

If she starts making repayments now, when the debt has not been ring fenced, then the money won't go towards the debt, it will be applied to her ongoing energy usage.

@DoreenonTill8 - no, they didn't repay any money. I don't fully understand, and I don't think she does either, but initially, she was told she may be entitled to a refund as the gas leak had been going on for a while. She was led a merry dance over so many issues, and eventually (god knows why) but to provide her with an up to date bill they had to recalculate her past 18 months bills. Including the electric, despite the fact that the electric played no part in this.

She can't go back to the ombudsman with the case as it was officially 'resolved'. They did eventually provide the bill that was long overdue but because they had taken a year to provide this, and during this time she was going through a difficult personal time, the money that would ordinarily be earmarked for her bill had been used for other pressing matters. She's now back on track, apart from this.

Ah, esshk.. that's a bit hard then, so were no payments being made over a year?

@DoreenonTill8 - that's what I'm gathering! I'm not going to stand in judgment but yes...bit daft not to be putting money aside for the eventual bill. She probably had other stuff on her plate at the time but....here we are.

Now a monthly amount is being set aside for bills, as she usually does, so the next one is covered, it's just this one outstanding that needs to be ring fenced before she pays anything as otherwise cash will go straight to the debt. And the company won't ring fence it until a payment arrangement has been made.

@PunishmentRoundupWithJoon how much is the bill if you can say?

I don’t think it really matters if it’s ring fenced or not as long as she is also covering her current usage. Mine wasn’t ring fenced I just had a huge debit balance every month. I paid my agreed amount and in summer it took a lot off the debt in the winter very little. It’s taken us about 3 years to get it to where it should be clear by the end of the year.

Also, the companies should allow at least the amount of time they allowed the debt to bill to repay. They usually try and make repayment in 12 months. They allowed my mess to build up over 3 years. I stuck my head in the sand until they came down hard on collections (after three years of barely any payment!)

@FawnFrenchieMum - it's just over £900. And that would be approximately 10 months usage, so even after they had recalculated, it's not like the bill was any less than it would have been if things had gone as normal. She's a 'low user' - extremely cautious due to her circumstances. Have seen a couple of her old bills and compared to mine...mine are almost double what she pays.

She's been given the number for a mental health organisation that also deals with money issues, so she might give them a call.

Also a possibility a family member may be willing to step in with the payments - she has to wait and see.

Appreciate your advice and input, it's all being noted! It's good to hear that you should be clear of your debt by the end of the year - that'll be such a relief, I bet.

They should absolutely be accepting £50pm on a £900 debt, if they recalculated 18 months worth of bills then they should give her 18 months to repay = £50pm.

FWIW our debt was £5k and we still didn’t get moved to prepayment meters. We have about £900 left to pay and will be clear by the end of this year.

When DH and I were first together, and both on really shit wages, he had a debt from his previous relationship. At one point, all he could afford was a token £1 a month to service it. He had to speak to various different people to get it sorted but eventually reluctantly they accepted that. I guess it costs them more in recovery costs really if someone isn’t paying anything at all. You just need to speak to someone really senior and hoped they can approve something similar. Your friend should offer a phone call once every six months to reconsider her finances and see if she can pay a little more. Good luck 🤞

@GiveMeSomeWaterItsHot - thank you. Yes, she was advised by an advice agency (think it was Stepchange) to offer a token amount of £1 - they even provided a template letter. But that was rejected. They came back with a £40 minimum monthly payment despite her having provided a copy of the budget the agency had produced for her, clearly showing this was not affordable.

Think she was calling a new advice place yesterday, so hopefully will speak to her soon about that,

Appreciate your advice - and glad in your case the offer was, albeit reluctantly, accepted!