Retailers can restart debt recovery from English businesses not affected by Covid

From today (1 June), retailers will be able to pursue debt recovery processes against businesses which have not been affected by Covid 19.

Ofwat accepted for immediate implementation Customer Protection Code of Practice Change Proposal CP0007, amending the blanket customer protection measures put place for the Covid-19 pandemic and which expired on 31 May.

Under the decision, customers who are seriously affected by Covid-19 will continue to be protected as before from the prospect of disconnection, enforcement of debt and interest and late payment charges. But customers who are operating normally and can pay will be subject to normal debt recovery processes. Retailers have been told to tailor their approach to customers who have been impacted by Covid, but not severely.

To do this, retailers are now required to differentiate between customers who genuinely need support and those who should be expected to pay. Ofwat has told retailers to produce ‘Covid-19 Repayment Schemes’ to ensure the approach is tailored and proportionate, depending on whether and how seriously each customer has been affected by the virus. These schemes will be available until 31 March 2021, to align with the date that retailers will be required to have repaid all wholesale charges that they have deferred using CPW093 and CPW096.

Ofwat has not codified the form each Covid 19 Repayment Scheme must take, but has produced a set of principles for retailers to follow in developing and implementing their schemes. It has also told retailers to provide “clear and accessible” information on their website informing customers about the measures in place.

Finally, Ofwat said it had decided not to extend the protection for self-supply retailers from disconnection (which was introduced by CPW094) beyond 31 May 2020. “This is primarily because self-supply retailers are able to add Covid-19 vacant flags in CMOS for premises that are closed or experiencing a 95% reduction in its usual business activities themselves and this will consequentially result in a reduction of its bills. We are also aware that self-supply retailers are not intending to utilise the payment deferral scheme and as such do not require additional protections.”