Failing to pay energy bills can have serious consequences, experts warn

CONSUMERS with unpaid energy bills as low as $167 are being knocked back for loans because of black marks on their credit records.

CONSUMERS with unpaid energy bills as low as $167 are being knocked back for loans because black marks have been put on their credit records.

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As families battle soaring electricity and gas costs, there are fears they are at increasing risk of adverse credit ratings.

Victoria’s Energy and Water ­Ombudsman Cynthia Gebert warned: “Given the challenges customers are experiencing ... we would expect this to be an ongoing issue. They are increasingly likely to end up in danger of bad credit ratings due to struggles paying rising energy bills.”

Not paying energy bills can have serious consequences for loan applications.

Utilities providers may report ­defaults for bills of $150 or more that are at least 60 days overdue if they follow proper procedure, such as sending warning notices.

Payment defaults can linger on an individual’s credit file for up to five years, even if the debt is repaid.

Almost 8300 customers raised ­credit rating complaints with the
ombudsman in the past five years, figures obtained by the Sunday Herald Sun show.

Most relate to their domestic electricity or gas accounts.

The ombudsman can intervene if defaults are incorrectly placed on files. Bungles include:

A CUSTOMER denied a loan after a power company mistakenly listed a $168 default for an account that was not in her name;

A WOMAN denied a home loan after a $1565 electricity debt was settled via a payment plan a year earlier. Her retailer removed the default listing, and paid compensation for storage charges incurred because she had to move into a rental property; and

A MAN’S $1100 energy debt was listed, even though he had requested hardship assistance earlier and was setting up a monthly payment plan.

Thousands of customers have lodged credit rating complaints with Victoria’s Energy and Water Ombudsman in the last five years. Picture: iStock

Other errors include not sending required notices, listing wrong debt amounts, and sending warnings to outdated addresses despite being given new contact details.

Ms Gebert said people were often shocked to learn default listings could result from unpaid utilities.

Some missed final bills because they had moved out of properties and did not update their address details.

Cases where default listings were found to be correct included a woman denied a loan application due to a $167 outstanding debt. Notices were sent to her last known address.

An electricity customer caring for a relative overseas at the time of notification also unsuccessfully challenged a $536 default listing as he had not provided a forwarding address.

Major nationwide credit reporting bureau Illion, formerly known as Dun & Bradstreet, disclosed that the average electricity and/or gas bill default was $1030.

It would not disclose the number of Australians who have energy debt listings.

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@KarenCollierHS