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7. Switching supplier when you have arrears
Where there is an unpaid bill, a supplier may block a transfer to another energy provider. This is also known as a ‘debt objection’ or ‘debt blocking’.1Condition 14.4 SLC This applies to debts owed for 28 days or more.
However, if you have a prepayment meter and carry outstanding fuel debts of between £10 and £500, these can be assigned to a new supplier. The new supplier must consent to taking you as a customer and the assignment. The debt is then carried over to the new supplier and you pay it instead. Within this boundary, your existing supplier cannot block a transfer. This should encourage greater flexibility, energy efficiency, competitive tariffs, assist you in discharging your arrears and switch suppliers more easily, even when in debt. This process is known as the ‘debt assignment protocol‘ and is implemented in the Standard Licence Conditions.2Condition 14.6 SLC; Ofgem debt assignment protocol for prepayment meter customers, letter 12 May 2015 The protocol is the mechanism used by suppliers to facilitate a transfer of supply to another supplier when an indebted prepayment meter customer requests a switch. Similarly, if you have a disputed debt of £500 or less transferred onto a prepayment meter, the supplier cannot block a transfer where charges are disputed in their entirety or there is supplier error.3Condition 14.7 SLC; The precise scope of this condition has yet to be tested by the courts or by the regulators.
One such situation may be where you have offered and paid a lesser sum in full and final settlement for an existing debt and accepted the imposition of a prepayment meter.
Suppliers are required to keep evidence of that request and of the reasons for it for at least 12 months after the request is made’.4Condition 14.10 SLC If a supplier objects to a transfer, it is required to as soon as reasonably practicable give you formal notice:5Condition 14.9 SLC
    that an objection has been raised and the grounds of the objection; and
    how you may dispute or resolve such grounds; and
    that you have 30 working days to pay outstanding charges.
Suppliers must also offer you advice or information on:
    energy efficiency; and
    debt management; and
    alternative contracts that may be available to you.
Normally, within 90 days of taking over a supply, the new supplier is given a notice by the previous supplier to assign the charges. The new supplier must then pay the outstanding charges to your previous supplier. Your new supplier can then seek to recover the money from you. If the old supplier fails to act within prescribed time limits, the right of assignment may be lost.
In such cases, you should not be regarded as having failed to pay any charges for the supply of fuel:6Sch 6 para 1 (9) EA 1989; Sch 2B para 2B GA 1986
    if the supply is genuinely in dispute; or
    where charges are in relation to the provision of a gas meter.
Contact Citizens Advice consumer service for advice on the position with charges and difficulties with a supplier; it may also be worth involving the Energy Ombudsman (see Chapter 14).
Ultimately, it is the County Court in England and Wales and the sheriff court in Scotland which could be called upon to determine the matter (see Chapter 14). A debt which has been assigned is not enforceable if there is a dispute which you are prepared to raise as a defence. Only when the dispute has been resolved against you and a judgment given will any debt be legally enforceable. Alternatively, your new supplier also has discretion to waive charges or collect a lesser sum.
1     Condition 14.4 SLC »
2     Condition 14.6 SLC; Ofgem debt assignment protocol for prepayment meter customers, letter 12 May 2015 »
3     Condition 14.7 SLC; »
4     Condition 14.10 SLC »
5     Condition 14.9 SLC »
6     Sch 6 para 1 (9) EA 1989; Sch 2B para 2B GA 1986 »