Wonga were criticised by both the media and many of their own customers after it was found that they were using a fake debt collection service in order to chase customers in debt. Since this was revealed, several other companies have also been found to have engaged in this shady practice. One of these companies is the energy supplier Npower. The Big Six gas and electricity company was found to have sent letters to customers who were behind on their payments from fake debt collection agencies.
The letters sent to households in arrears were labelled as being from Collections Direct. They informed Npower’s struggling customers that they would be called to a court hearing if they continued to avoid paying their bills. They also warned that further inaction would result in bailiffs being summoned to the customers’ houses.
One example of Npower’s fake letters began with the words ‘Final Demand’ in big bold lettering. It went on to say:
It’s a legal requirement to send you notice of an intended court summons before it’s issued. This letter fulfills this requirement even if you don’t actually read it.
The use of make believe debt collection agencies is starting to look like common practice among many large companies. Npower and Wonga are not the only companies found to have engaged in this practice. A number of banks have also been found out for doing it, including HSBC and NatWest. So too has the Student Loans Company.
Npower did not apologise in their statement about the revelations. The statement simply said:
We use these letters after we have made four attempts to communicate with the customer, three of them using the Npower logo and letterhead – the other by phone. The purpose of this letter, with a different name, is to make sure the customer knows that the process has reached an escalated stage, when we or an external agency will be pursuing the matter through legal action. However, we are still clear about npower being the sender of the letter and continue to offer help and further time for payment. While our letters are already fully compliant, we are looking at their content.
Npower’s practices are not going to win them any new supporters. There has been a 93% increase in the amount of complaints made by customers about the energy supplier in the last three months alone. They are also at the top of Ofgem’s list of the most complained about companies from the Big Six.