Co-op Energy describes itself as a “company with a heart” that makes a “real difference in our communities”. It has certainly made a difference to Clive Barber. He and his family are preparing to sell their house to pay a £12,600 electricity bill that arrived out of the blue.
It has also made a difference to Kel Harvey and his wife, who are being pursued by a debt collection agency for unexpected arrears totalling £3,700. And to Thomas Wells, who has been paying £100 a month to clear a sudden debt of over £2,000, despite switching to another supplier in 2016.
All three appear to have fallen victim to Co-op’s technical meltdown in 2015, when a new IT system played havoc with billing. Customers’ direct debits were stopped, bills weren’t sent and customers who tried to submit meter readings found themselves locked out of their online accounts. Co-op was ordered by regulator Ofgem to pay compensation totalling £1.8m to 260,000 customers.
However, it seems that some of its customers are now paying the price of the fiasco. Barber and Wells were among those whose direct debits were suddenly stopped when the new system was introduced. Harvey claims he asked in vain for a bill after switching to Co-op in 2016 and received a threat of disconnection before the first one arrived, demanding nearly £3,000.
Rules introduced by Ofgem last year forbid utilities companies from charging for more than 12 months of unbilled energy use before a correct bill has been issued. Those rules replaced a voluntary code to prevent companies who failed to bill their customers correctly from issuing shock demands for hefty arrears. However, in some cases Co-op appears to have ignored this in its efforts to claw in money it neglected to claim.
Barber is being pursued by debt collectors for arrears going back to 2014 and has been forced to accept an expensive prepayment meter while he pays off the debt. He switched his supply to Co-op Energy in 2013 and set up a direct debit to pay for his consumption, which is high because his remote Cumbrian home has no gas supply. But his quarterly statements ceased in 2015, when he was notified that the company had installed a new billing system.
He was assured his direct debits would continue as usual and his service would not be affected. Ten months later he received an email from Co-op Energy informing him that his account was £4,191 in the red.
“On several occasions I agreed to increase the direct debit and to pay off the three years’ worth of arrears,” he says. “Each time, only a few payments were taken, then stopped.”
He says he has been receiving weekly calls from debt collectors appointed by Co-op and that the debt has spiralled to £12,600 as he has struggled to keep pace with the repayments.
“Each time I explain the situation, and how we are now paying the debt off through a prepay meter at an agreed amount each week. I ask them to remove me from the call list, which they agree to do, but it simply does not work,” he says. “The callers have no record of my history with Co-op Energy. As far as I am concerned this has amounted to harassment.”
Harvey opted to pay for his electricity quarterly after signing up to Co-op Energy in July 2016, but despite his requests he says no bill arrived and his smart meter, which should have relayed live readings, turned out to be dumb.
“We are now in the position of being threatened for unbilled arrears dating back to 2016, despite numerous requests to sort out a proper, regular reading, billing and payment cycle,” he says. “Earlier this year we received the first two proper bills from them and we are currently making direct, manual payments of £200 a month, and yet they have seen fit to pass our ‘debt’ to a third party agent without notice to us.”
Wells says Co-op Energy stopped collecting his direct debit payments in April 2015. He alerted the firm, but it did not fix the error for another five months. The problem resumed in April 2016 and Wells found himself unable to access his online account.
In July that year he decided to change supplier to force the company to bill him. “I assumed any arrears would need to be cleared before it would allow a transfer but it let me go without issue,” he says.
“Nearly two years later, in March 2018, I was notified that I was £4,352.47 in arrears for a period ending July 2016. A week later, I received another letter stating I was £2,165.45 in arrears for the period ending 6 July 2016. A third letter, with the same date, told me I was £2,307.90 in arrears, but for a period ending 27 July.
“Eventually, I agreed that the arrears should be set at £2,165.45 and am paying £200 a month on top of the dues to my current supplier.”
Co-op Energy only acknowledged that the back-billing rule should have been applied to Wells and Barber after pressure from the Observer. A week after we challenged it over Wells’s predicament, it cancelled his debt, refunded the £800 he has so far repaid, and added £150 in goodwill.
It has now reduced Barber’s debt by £3,079 to reflect the periods when his payments were stopped. It says: ‘The service Mr Barber has received does not meet the high standards we set, and which our customers expect, and we have apologised to him for the experience he has had. Having reviewed his complaint, we agree that some of his outstanding balance is covered by the back-billing code and we have therefore discounted his account accordingly.”
However, the company, although acknowledging delays in resolving problems with Harvey’s smart meter, insists he was billed on time and therefore does not qualify for backbilling. It says: “We take the back-billing principles seriously and have a number of processes in place to ensure we comply with them in all cases. Unfortunately, there have been a very small number of complaints where these processes weren’t sufficient. We have looked at those complaints again and where the back-billing principles apply, we have reduced customer bills accordingly.”
Even with his debt reduced by the rule, Barber is struggling to repay the balance and says he is paying for Co-op’s incompetence. “The debt is so bad we are decorating our home to sell, as we can no longer afford to stay here. I have been a tenant or a home owner for 35 years and never had a payment issue with any other utility supplier.”
