In May 2013, consumer credit regulator the Office of Fair Trading (OFT) issued additional guidance to providers of the Green Deal. The scheme launched in January 2013 and aimed at making households and businesses in the UK more energy efficient.
Under the scheme, the household or organisation agrees with their provider the work to be done and the cost. The OFT is involved in the Green Deal as the scheme involves an element of credit, in that the homeowner or organisation pays for the costs of their energy-saving measures in instalments over a period of time, via their electricity bill. The idea is that the monthly repayments will be met by the cost savings made as a result of the energy-efficient alterations made to the property. When collecting payments, providers must abide by the OFT’s Debt Collection Guidance (DCG), which was updated in November 2012.
When a Green Deal property is sold, the new owner must meet the repayment obligations, and it is this situation which is covered by the latest guidance.
The OFT, in conjunction with the government’s Department for Energy and Climate Change (DECC), has now made it clear to the Green Deal providers that the new owner is not obliged to maintain the repayments if there has been a breach of the rules surrounding disclosure and acknowledgement (D&A), which relate to the need to inform a prospective buyer of the need to maintain the previous owner’s Green Deal obligations. If the bill payer has made a complaint to the provider on this issue, the provider must investigate the matter fully in line with the requirements of the Green Deal Code of Practice and the Guidance on Green Deal Sanctions and Appeals, and if it finds in the customer’s favour, collection of the payments must be halted. This applies even if the complaint is referred to the Green Deal Ombudsman and Investigation Service. If there is “genuine doubt” about whether the D&A provisions have been breached however, then collection of payments can continue.
The joint OFT and DECC document highlights Paragraph 3.9(k) of the DCG, which explains that “failing to cease debt recovery activity whilst investigating a reasonably queried or disputed debt when the debtor has, or appears as if he may have, valid grounds for the query or dispute,” is unfair and improper.
The credit watchdog commented: “In the OFT’s view, if the provider is satisfied, following this initial investigation, that the D&A provisions have been, or are highly likely to have been, breached, the provider should suspend collection of the Green Deal charge, in line with the DCG.”