How heat suppliers can turn complaints and arrears into a positive outcome

Debts, consumer complaints or payment difficulties can be a chance for good customer service to come into its own. It’s an opportunity to interact with the customer, breaking down the ‘them and us’ mentality with a human face, and reducing frustration with the system through education and guidance.

To start with, it is crucial to react quickly and effectively to complaints, and proactively to suspected arrears. “Heat providers should aim to proactively manage accounts, as residents faced with debt can often bury their heads in the sand and fail to engage with suppliers,” says Fiona McDonald, head of customer services at Switch2.

If heat suppliers are able to identify vulnerable consumers, a response can be put together before debt builds up. Consumers should be assured that there is a payment option to suit them, including PAYG meters to avoid future debt.

The growing availability of smart meters means consumers can be made much more aware of how much they are using and its cost, which must be covered up front. Payment can be facilitated by a variety of electronic means, such as mobile top-up, helping residents avoid debt or losing heat supply, and alerts can be communicated before the meter runs out.

Best practice for dealing with customers in arrears can be found at the Citizen’s Advice Bureau (CAB). Its’ guidance focuses on reducing barriers, while identifying and responding to consumer vulnerability. Communication should always be clear and concise, and focus on the positive, including a positive response to any offer of payment.

CAB says it is important to provide incentives to engagement, and to recognise and respond even to late responses. Be cooperative and provide all consumers with ‘breathing space’, while objectively assessing how much a consumer can reasonably pay.

Research into barriers to deployment of district heating networks published by DECC, show issues regarded as important both by local authority and property developer representatives relating to debt and payment issues. These include the need to ensure transparency in heat pricing, and a lack of generally accepted contractual arrangements.

A key finding is that inconsistent pricing of heat is more of a barrier to district heating if residences are not metered – as consumers do not have the visibility they need to monitor how much heat they are using. Regardless of whether billing is based on individual users’ consumption or not, the research shows that transparency in pricing is the essential ingredient in obtaining customer confidence and avoiding debt.

The research also shows that, while there are already examples of standardised contracts - for example in existing good practice guides - there is a general consensus that good customer service requires additional examples that deal with different types of scheme and circumstances, without increasing complexity.

In its guide, the Landlord’s Guide to Rent Arrears, the National Landlords Association (NLA) emphasises that debt prevention is better than cure, and recommends the use of PAYG or smart meters. According to the NLA, spotting problems early helps and a heat supply contract should therefore clearly stipulate when and how heat suppliers expect to receive payment. Depending on the reason for the late or non-payment, it may be possible or advisable to negotiate a repayment plan, which brings the arrears back under control.

“It is possible to mitigate the damage done by debt, if you choose the right strategy”, say the guide’s authors.

It emphasises helping the resident assess options, identifying short-term fixes and discussing long-term plans. Go to the state benefits advisor to assess eligible benefits. In the end, the best planned projects can mitigate the risk of arrears by factoring in the potential cost of debt into your planning as early as possible.

Takeaways:

• Debts and consumer complaints are an opportunity for positive interaction and engagement with the consumer. Respond quickly, and where necessary be proactive in managing consumer accounts
• Smart meters help tackle debt and educate the consumer
• CAB emphasises reducing barriers and clear communication
• Poor visibility and inappropriate contracts can create barriers to deployment
• Debt prevention is better than cure
• Good schemes should factor cost of arrears into project plans

Learn more about best practice customer service in community heating.