Debt-hopping

Thousands of people who owe money on their energy bills are effectively leaving their debts behind when switching to other operators, according to The Sunday Business Post, which says this is a growing trend the energy regulator is considering plans to prevent.

So-called ‘debt-hopping’ is believed to be widespread in the electricity and gas markets and there is currently nothing operators can do about it because they are precluded from discriminating against customers who are in arrears or in debt with a rival supplier.

The Commission for Energy Regulation is now telling operators it is considering ‘debt-blocking’ because the practice has become so rife.

The ESB is carrying rolling debts of €14m from customers whose accounts remain unpaid and many of them have already switched to other suppliers. Bord Gáis said about 24,000 of its customers who had switched to Airtricity in the last year had been in arrears, leaving total debts of around €7m after them.

A Bord Gáis spokesman also said around 10% of all its customers were currently in arrears and debt recovery was very difficult once somebody switched as the company no longer had a “relationship” with the person who owed the money (shorthand for an inability to turn off the power, presumably!).

The company favours the introduction of a pay as you go model for energy, similar to that used by mobile phone companies.