The life-changing bill came out of the blue. Jane Morrison-Ross was informed by a debt collection agency that she owed £10,260 to Together Energy, which ceased trading in February 2022. It gave no indication of what the charges were for.
It turned out that she was being invoiced for the four years after she left the billing address. She submitted proof of her residency but to no avail. The agency, appointed by Together’s administrators, insisted that if she did not pay within seven days, she could face court.
“It feels like a Kafka novel,” she says. “No one will listen. I have an email trail as long as the Nile. They have ignored my complaint, my subject access request, emails showing tenancy agreements, account closure, and my repeated attempts to sort this out.”
Her plight exposes a hidden gap in consumer protections when an energy company ceases trading. Customers’ energy supply is automatically transferred to a Supplier of Last Resort (SoLR), appointed by energy regulator Ofgem. However, accounts that are in debt may be passed on to the administrator appointed to wind up the failed firm.
Energy administrators are not regulated by Ofgem, or the Financial Conduct Authority, and the Energy Ombudsman has no remit over their activities.
Moreover, while energy firms have to agree affordable repayment plans with customers who are in debt, administrators are not bound by the same rules.
This means customers who do owe money could have their budgets wiped out by a shock bill, while those who contest the charges have nowhere to turn except the courts.
“There’s a glaring gap in the regulations,” says consumer campaigner Martyn James. “While, in most cases, both credit and debit balances are transferred over to the newly appointed supplier, this is not a regulatory requirement.
“This leads to a frankly outrageous situation where you owe a ‘debt’ to the administrators of the company who are neither energy experts or qualified to investigate billing disputes.”
It’s likely that many of the energy bills issued from beyond the grave could be unreliable. The account records of some suppliers were in disarray when they ceased trading, and administrators are not authorised to disclose details of defunct accounts to the account holders, who no longer have access to their online portals to check for themselves.
Together Energy’s reputation plummeted when its customer base increased by 60% overnight in 2019. The three-year-old company had taken on the 36,000 customers of failed supplier OneSelect, but lacked the infrastructure to cope. By 2021 it was ranking 75th out of 77 energy suppliers on Trustpilot and an inadequate billing system left customers who were owed money facing demands for hundreds of pounds.
Morrison-Ross had been in dispute with the company for five years. She says that it failed to close the account at her old address when she let it to tenants in 2017. The £10,000 bill, which arrived last month, dates back to 2018 when the tenants were living in her former home and were paying their own separate account with Together Energy.
“I am honestly overwhelmed by this,” she says. “I am the sole breadwinner with three children and no savings to clear this. I wrote to the administrators, who replied saying that they didn’t have access to the data and had no record of the information I have already provided.”
Following investigations by the Observer in 2021, Together admitted it had failed tenants who had tried to end or open accounts.
Morrison-Ross had submitted a subject access request to shed light on the confusion, but Together failed to respond before it went bust. The administrator, FRP Advisory, says it is not authorised to provide the requested information.
British Gas, the SoLR which took over Morrison-Ross’s current, uncontested account, was also unable to help since it did not inherit accounts that were in debt.
The bill was cancelled and the account closed after the Observer took up the case with FRP. But dozens of other Together customers are reporting unsubstantiated demands on a dedicated Facebook page, while others claim they are still awaiting credit refunds 16 months after the company ceased trading.
Retired Post Office audit manager Ron Seymour has helped around 50 of them contest their bills. “Together Energy problems started when they moved from one portal to another, which led to numerous accounting and billing errors,” he says.
“Customers had no access to the portal after they went into administration, so bills are impossible to disprove. I’m aware of elderly people who get these demands and are scared witless.”
When the company folded, Ofgem assured the 176,000 domestic customers they would be protected by its “safety net” and need not worry. However, that only secures energy supply. Those contesting unexplained debts were abandoned when the Energy Ombudsman, having lost its remit, closed all outstanding cases.
Ofgem told the Observer that although it has no regulatory powers over administrators, it expects them to treat customers fairly. Under the back-billing rule, customers can’t be held liable for un-billed energy dating back more than 12 months. It suggests those who dispute a bill contact the administrator “in an attempt to gain a resolution”.
FRP Advisory says it has closed Together’s customer support functions, and former customers who are disputing bills must liaise with the debt recovery agents. FRP Advisory says the agents will help with payment plans for customers in hardship.
Martyn James says urgent action is needed. “I’ve seen far too many examples over the last year of aggressive administrators calling in debt collectors, or threatening court action, over bills that they can’t prove. It’s clear this gap in the rules needs to be closed, so consumers do not have to turn to solicitors to solve problems that were never their fault.”
