Discussion - should OVO do more to help customers stay out of debt?

  • 20 April 2018
  • 3 replies

Userlevel 7
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Leave a comment with your thoughts on the role you think your energy supplier should play to make sure you stay out of debt.

What other things could we do to help our customers?

Do we do too much?

3 replies

Userlevel 7
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Ah... this is another HUGE topic @Tim_OVO!

Can I first separate those in financial difficulties into two broad categories:
  1. Customers whose overall level of debt means that they are likely to default. This could be due to a slow increase in indebtedness, or precipitated by a sudden event such as illness or redundancy.
  2. Customer in Fuel Poverty, which I will here use the broad definition of households spending for that 10% of their income on energy.

I believe both categories could be helped by OVO's strategies. However, for brevity I'm sticking to just the first group in this post.

Can I also point out, @Tim_OVO, that OVO has a member of staff with considerable experience in this field. Before joining the company they worked in a National Poverty Alleviation Project and have subsequently helped set up local groups with Debt Mentors and practical assistance available.

I suggest you might want to have a (long) coffee break with the person who introduced us two when I popped into your Bristol offices about 6 weeks ago. They will enthuse you with amazing stories of intervention to rescue people from crippling debt and keep families together - truly inspiring!

Returning to the main point, even from the basis of financial risk reduction, OVO would find it better to be involved with debt management at an early stage.

By the time most people contact a Dept Service it is too late to satisfy their Creditors. Typically the Debt-Service will take over all their finances, prepare the required legal documentation to ensure they are left with the basic necessities, and then contact the Creditors to arrange a reduction.

So a bank might receive a call from the Debt-Service like this:

"We have acquired control over X's finances, and note that he's maxed-out his credit card at £15,000. We'd like to suggest you take £1000 and write off the rest."

Bank: "Woah, not so fast! He provided us with evidence of his income and satisfied us that he needed that level of credit. We've done nothing wrong here."

DS: "I'm not suggesting you have. But the facts of the matter are that we will be recommended he applies to the courts for bankruptcy, in which case your bank will receive nothing. Right now I'm offering £1000."

Bank: "We'll take £3000 minimum."

DS: "Tell you what. Let's be sensible here. We'll halve that to £1500 and you can have the money this afternoon!"

Faced with that stark choice, guess what the bank does?

Now OVO has no better protection than a credit-card issuing bank. Moreover, Ofgem rules will forbid you from removing energy supply to a customer in poverty.

A far better choice is for OVO to partner with a reputable Debt Management Service and actively promote that a customer agrees to a referral at the earliest moment when your billing system detects there is a problem.

As a "thank-you" for making the introduction to the Debt Service, you could request that you are seeking a higher percentage of settlement than gets offered to other Creditors. Moreover, since you have to continue supplying them with energy anyway, you could also liaise with the Customer's Debt Mentor to take the money over a period of time, thus becoming part of the answer to lift the Customer out of poverty rather than another millstone around their neck.

And there I'll put my virtual-pen down...
Userlevel 5
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Just discovered this topic as you know I have been unwell so didn't spot this sooner.

I think the key things are text messages and emails, assuring people that OVO are there to help in these situations (Of which I have first hand experience) is key to making people feel comfortable about the fact they are going to get thru to a nice friendly person who understands and WANTS to help, this should be emphasised maybe in the the or email.

It would also be helpful to remind customers of the perils of Prepayment meters, running out of credit, the fact some companies work out 20% dearer paying this way and so on, that deepens the problem so prevention for those facing such extremes should be paramount.

The ability to pay off any area by Direct Debit Far outweighs the pitfalls of prepay and OVO are very good at making sure this is the very last resort.

I also feel OVO are very good at promoting where to get help.

I feel OVO does a fantastic job of helping people in such situations, another reason why OVO, really do, and show, they care for every single one their customers.

It's a dying thing with all the other companies on the market now.

I think one big way that OVO (and indeed other companies) could help all their customers, would be to substantially reduce their fuel prices. The price charged to the customer of both gas and electricity has risen exponentially over the past few years, but people's incomes have not kept pace with this price increase. Therefore, drastically reducing the cost of fuel would help everyone, but especially those people who are struggling to pay their bills.