How to deal with the loan sharks
As a consumer expert, I have been in the media a lot over the years talking about energy prices, how they are affecting consumers and what people can do if they are struggling with paying bills. And today was no exception as I was on Channel 5 News discussing what people can do.The years of discussing how we can save energy have long gone. More and more people are literally choosing to heat or eat and in some cases not doing either.
Consumers energy debt
New research by End Fuel Poverty (Energy debt fears plaguing UK households as industry profits rise) reveals some shocking statistics:
The figures show that 31% UK adults are currently in debt to their energy company or worried about falling behind. This rises to 45% of parents with a child under 18 and 35% of disabled people.
21% have missed meals and 18% have used a foodbank.
The average UK energy debt is £750 per household.
In debt to loan sharks
Below is a Tik Tok video on some of the statistics and what you can do regarding about loan sharks: if you are thinking of, or are, using one:
@thecomplainingcow New research from Stop Fuel Poverty suggests almost one in four people already in energy debt owe money to someone who makes them feel scared. That’s a worrying sign that some households are turning to risky borrowing just to keep up with essential bills. If you’re using a loan shark, seek help. The Illegal Money Lending Team Share this to help others 👇 Were you aware that debt owed to a loan shark can be written off? #EnergyBills #borrow #Lending #DebtAdvice #CostOfLiving :::
The fear factor
24% of people in debt owe money to someone who makes them feel scared.
If you are in debt to someone who loans money and is not registered with the FCA, then contact the Illegal Money Lending Team. (IMLT). Over the last 27 years, it successfully written off over more than £92 million in illegal debt and helped over for 32,000 people, arrested over 400+ loan sharks and secured prison sentences of over in excess of 600 years in the last 27 years.
The IMLT says that people often think that they are borrowing from a “friend” who turns out to be an illegal lender. It also emphasises that the borrower has done nothing wrong and should not worry about this common misconception. The organisation offers support to people who have borrowed from illegal lenders, as well as taking enforcement action.
Cath Wohlers, Illegal Money Lending LIAISE Manager, says “Don’t suffer in silence, help and support is available”.
Consumers in arrears
Of those in arrears:
- 15% were referred to hardship funds
- 15% are on a repayment plan
- Only 18% felt they had been treated fairly
- Just 8% were referred to debt advice and
- 13% reported no contact from their supplier in past 12 months
However, under Ofgem rules, energy companies must try to help consumers with their bills. This could be, for example, access to hardship funds, payment plans, pauses, etc. See my article Available financial support for energy customers
The affect of debt on health
Nearly a quarter (22%) of those in energy debt said that bills or arrears had impacted their mental health. 19% reported physical health effects and 21% experience sleepless nights. 14% said it had affected their children’s health and wellbeing.
Simon Francis, Coordinator of the End Fuel Poverty Coalition, said:
With energy prices rising by another 13.5% next month, the mental and physical health consequences of energy debt will only deepen. The energy industry, which has caused this debt through its profiteering, must be made to contribute to clearing this debt mountain.”
Frazer Scott, CEO, at Energy Action Scotland, commented:
Far too many households are saddled with debt to their energy suppliers which they simply cannot repay. Government, industry and its regulator have provided no effective plan to reduce this debt and help to keep people warm and safe in their homes.”
Getting help with energy bills
The National Audit Office (NAO) published a report earlier this month, revealing that consumer debt to water, energy and broadband companies is more than £7 billion and that millions of utility customers are missing out on support for essential bills. See this NAO page for more details: Regulating water, energy and broadband to protect consumers in vulnerable circumstances.
If you’re having problems with energy bills, contact your supplier.
Under Ofgem rules, suppliers must work with customers in financial difficulty and may be able to offer payment plans, repayment arrangements or other support.
And get free debt advice as early as possible from Citizens Advice, StepChange or National Debtline.
Nobody should be borrowing from people who frighten them just to keep the lights on.
More help with energy
How to save money on and complain about, energy
Further general money help and debt advice and support
Check the Better Off Calculator. Put in your details and see the benefits to which you may be entitled.
You can also get debt advice from Citizens Advice, StepChange and National Debtline.
Visit the website of Turn2Us, who provide information and advice on what assistance is available, including charities that will help you pay your bills.
Further help with complaining effectively about your energy provider and more
For masses of information, tips, guidance, laws and regulations and templates to help you complain effectively GET THE BOOK! How To Complain: The ESSENTIAL Consumer Guide to Getting REFUNDS, Redress and RESULTS!
Want to get better at complaining? See 101 Habits of an Effective Complainer
Save yourself time and effort finding the laws and wording a letter of complaint and download a template, fill in your details and get that redress
Purchase downloadable templates to gain redress
Templates for complaining about utilities
