| 16.1°C Dublin

€200 up front to open Bord Gais account

DEBT-hopping by energy customers has led Bord Gais to slap a €200 security deposit on new tenants wishing to set up a direct debit.

The cost relates to new customers living in rented accommodation, Bord Gais said.

Householders have been taken aback by the requirement as many are not in a position to pay the sum up front.

The company, now called Bord Gais Energy, said the charge was necessary to reduce the risk of people absconding without paying off their bill.



Excess

The cost, which is refundable, is levied on new customers living in rented homes who wish to set up a direct debit.

Tenants who don't wish to pay by direct debit must fork over €300 to the company when signing up.

Up to a few years ago, a deposit was only demanded from those who paid their bill in ways other than by direct debit.

But the practice of debt hopping -- where customers switch energy suppliers but leave unpaid bills behind -- led to a change of policy. The deposit is used to clear any outstanding amounts, with the excess returned to the householder.

Homeowners who sign up to the direct debit system are not required to pay the sum.

"There's a high level of switching providers in the market. Debt hopping has become an issue. Customers accumulate debt and move to another supplier, leaving the debt behind," a Bord Gais spokesman said.

It was very difficult to get the money back, he added.

Bord Gais had to implement a "very significant write-off" of arrears last year. The spokesman said the exact sum would be contained in the company's annual report but he confirmed it would be several million euro.

Many customers continue to switch suppliers and there is a greater level of "transience" when it comes to customers living in rented accommodation.

ESB Electric Ireland charges a €300 deposit on new customers unless they pay by direct debit in which case the cost does not apply. No distinction is made between homeowners and tenants.

comurphy@herald.ie


Privacy