Security Deposits, Payment Difficulties, Disconnections and

Direct Debits

Security Deposits

9.1 The authorised person must not require a Domestic Consumer to pay a Security Deposit in relation to the supply of heating, cooling or hot water to their premises:

9.1.1 if that Domestic Consumer agrees that the premises may be supplied through a Prepayment Meter and it is safe and reasonably practicable in all the circumstances of the case for the premises to be so supplied; or

9.1.2 if it is unreasonable in all the circumstances of the case to require that Domestic Consumer to pay a Security Deposit.

9.2 A Security Deposit must not exceed a reasonable amount.

Consumers in payment difficulty

9.3 The authorised person must offer each of the services set out in paragraph 9.6 when it becomes aware or has reason to believe that a Domestic Consumer is having or will have difficulty paying all or part of the Charges.

9.4 Without prejudice to any other right or obligation under the Regulations or the authorisation conditions, the authorised person must not charge the Domestic Consumer for providing the services set out in paragraph 9.6.

9.5 In complying with paragraph 9.3 the authorised person must make proactive contact, as described in paragraph 9.8.2, with Domestic Consumers at the earliest opportunity to identify whether a Domestic Consumer is in payment difficulty, by contacting the Domestic Consumer no later than after:

9.5.1 two consecutively missed monthly scheduled payments; or

9.5.2 one missed quarterly scheduled payment; or

9.5.3 a Domestic Consumer has informed the authorised person that they are unable to make the next scheduled payment.

9.6 The services referred to in paragraph 9.3 are:

9.6.1 the facility for a Domestic Consumer to pay Charges:

(a) by regular instalments calculated in accordance with paragraph 9.7 and paid

through a means other than a Prepayment Meter; or

(b) by using a Prepayment Meter, where applicable to the relevant heat network and

where it is safe and reasonably practicable in all the circumstances of the case

for that Domestic Consumer to do so and where any instalments to be paid are

calculated in accordance with paragraph 9.7; and

9.6.2 the provision of information about how the Domestic Consumer could reduce the Charges that they must pay by implementing efficiency measures.

9.7 The authorised person must take all reasonable steps to ascertain the Domestic Consumer's ability to pay and must take this into account when calculating instalments, giving due consideration to:

9.7.1 relevant information provided by third parties, where it is available to the authorised person; and

106 Decision Heat networks regulation: authorisation conditions

9.7.2 where instalments will be paid using a Prepayment Meter, the value of all of the Charges that are to be recovered through that meter.

9.8 For the purposes of ascertaining a Domestic Consumer's ability to pay as set out in paragraph 9.7, the authorised person must give due consideration to:

9.8.1 having appropriate credit management policies and guidelines, which includes:

(a) allowing for Domestic Consumers to be dealt with on a case-by-case basis; and

(b) linking staff incentives to successful consumer outcomes not the value of

repayment rates.

9.8.2 making proactive contact with Domestic Consumers, which includes:

(a) making early contact to identify whether a Domestic Consumer is in payment

difficulty as set out in paragraph 9.3;

(b) regularly reviewing methods of proactive contact to ensure they meet the needs

of Domestic Consumers, in particular in circumstances where the authorised

person has not made successful contact with the Domestic Consumer;

(c) using every contact as an opportunity to gain more information about the

Domestic Consumer's ability to pay when the authorised person becomes aware

or has reason to believe the Domestic Consumer is having or will have payment

difficulty; and

(d) making Domestic Consumers aware of debt advice services when they raise

concerns about their ongoing ability to pay, in accordance with authorisation

condition B5 (Assistance and Advice).

9.8.3 understanding an individual Domestic Consumer's ability to pay, which includes:

(a) providing clear guidance and training for staff on how to elicit information on

ability to pay and monitoring the effectiveness of this;

(b) providing appropriate channels for Domestic Consumers to quickly and easily

raise concerns and facilitating conversations around Domestic Consumers' ability

to pay when requested;

(c) making full use of all available information; and

(d) proactively exploring payment amounts and payment methods which are

appropriate to the individual circumstances of each Domestic Consumer; this

includes debt repayment schemes such as those by which payments may be

deducted at source from a social security benefit received by that Domestic

Consumer.

9.8.4 setting repayment rates based on ability to pay, which includes:

(a) ensuring all available information is obtained and taken into account, including

the Domestic Consumer's circumstances identified on a site visit or when

installing a Prepayment Meter;

(b) only setting default amounts when there is insufficient information to ascertain the

Domestic Consumer's ability to pay and where default amounts are set, it should

be made clear that the repayment rate may change based on information about

the Domestic Consumer's ability to pay. In any event the levels of any default

repayment rate should be reasonable;

107 Decision Heat networks regulation: authorisation conditions

(c) not insisting on substantial upfront payments before reconnection; and

(d) pausing scheduled repayments for an appropriate period of time as part of the

Domestic Consumer's repayment plan and reviewing the Domestic Consumer's

repayment plan in accordance with their ability to pay at regular intervals before

re-instating scheduled repayments.

9.8.5 ensuring the Domestic Consumer understands the arrangement, which includes:

(a) clear communication with the Domestic Consumer which allows them to

understand how much they are regularly repaying; how the repayment will be

deducted; when the debt will be repaid; and what to do if they experience

difficulties during the arrangement; and

(b) for Prepayment Meter Consumers, repaying debt by a weekly amount explaining

that debt will be recovered regardless of usage.

9.8.6 monitoring of arrangements after they have been set up, which includes:

(a) monitoring of individual arrangements:

(i) for Domestic Consumers with credit meters, to check for the occurrence

of failed repayment arrangements; and

(ii) for Prepayment Meter Consumers, to check whether the meter is being used initially and on an ongoing basis;

(b) monitoring of the approach taken by staff when agreeing repayment rates, using

call listening and other techniques, to encourage a consistent and appropriate

approach;

(c) monitoring of failed repayment arrangements to understand whether

inappropriate rates are being set;

(d) monitoring of overall repayment rates and recovery periods to understand trends.

9.8.7 re-engaging with the Domestic Consumer after an initial occurrence of a failed repayment arrangement, which includes: engaging with the Domestic Consumer in a timely manner to discuss the repayment plan, including whether a different repayment plan or repayment method would be more suitable.

9.9 The authorised person must ensure that the terms and conditions of each Domestic Supply Contract reflect the following provisions of the authorisation conditions:

9.9.1 paragraphs 9.3 to 9.7 (inclusive) of this authorisation condition and authorisation condition B10 (Prepayment Meters), stipulating that charges may not be demanded or recovered unless and until it can be established that the corresponding contractual terms have been complied with; and

9.9.2 paragraphs 9.21 and 9.22 of this authorisation condition.

9.10 The authorised person must ensure that the terms and conditions of each Domestic Supply Contract provides for the right for the Domestic Consumer to offset any amount owing to the Domestic Consumer pursuant to the contract against any amounts owed by the Domestic Consumer under any other Domestic Supply Contract.

9.11 The authorised person must ensure that the terms and conditions of each Domestic Supply Contract stipulates, for the avoidance of doubt, that the relevant terms and conditions referred to in paragraphs 9.9 and 9.10 will continue to bind the authorised person notwithstanding that it ceases to be authorised including where its heat network authorisation is revoked.

108 Decision Heat networks regulation: authorisation conditions

Disconnection for unpaid charges

9.12 The authorised person must not Disconnect a Domestic Premises at which the Domestic Consumer has not paid Charges unless it has first taken all reasonable steps to recover those Charges by means of the service referred to in sub-paragraph 9.6.1(b).

9.13 For the purposes of paragraphs 9.12, 9.14 and 9.15, Disconnection includes Credit Limiting where:

9.13.1 it amounts to stopping the supply to the Domestic Premises; and

9.13.2 the Domestic Consumer does not pay Charges by using a Prepayment Meter.

9.14 The authorised person must not Disconnect:

9.14.1 in Winter, a Domestic Premises if the authorised person knows or has reason to believe that the occupants of the premises include a person who is under the age of 2 or is over the age of 75, disabled, terminally ill or chronically sick; or

9.14.2 at any time, a Domestic Premises if the authorised person knows or has reason to believe that the occupants of the premises include a person who has a medical condition which means that, for medical reasons, they need to receive or may need to receive a supply of heating or hot water throughout the year.

9.15 The authorised person must, before it exercises any right it may have to Disconnect a Domestic Premises, take all reasonable steps to ascertain whether any occupant of the relevant premises falls within the scope of paragraph 9.14.

9.16 Where the authorised person is a Bulk Supplier:

9.16.1 it must not Disconnect:

(a) in Winter, another relevant heat network if it knows or has to reason to believe

that the occupants of a Domestic Premises which is connected, directly or

indirectly, to that relevant heat network for the purposes of receiving a supply of

heating, cooling or hot water include a person who is under the age of 2 or is over

the age of 75, disabled, terminally ill or chronically sick; or

(b) at any time, another relevant heat network if it knows or has to reason to believe

that the occupants of a Domestic Premises which is connected, directly or

indirectly, to that relevant heat network for the purposes of receiving a supply of

heating, cooling or hot water include a person who has a medical condition which

means that, for medical reasons, they need to receive or may need to receive a

supply of heating or hot water throughout the year; and

9.16.2 it must, before it exercises any right it may have to Disconnect another relevant heat network, take all reasonable steps to ascertain whether any occupant of a Domestic Premises which is connected, directly or indirectly, to that relevant heat network for the purposes of receiving a supply of heating, cooling or hot water falls within the scope of paragraph 9.16.1.

9.17 Paragraphs 9.12 to 9.16 are without prejudice to the operation of, and are not be treated as affecting the interpretation of, any legal requirement or doctrine which may provide for landlords or other persons to be restricted from disconnecting the supply of certain services to their tenants or other specified persons in certain circumstances.

Provision of information

9.18 The authorised person must:

109 Decision Heat networks regulation: authorisation conditions

9.18.1 prepare a statement that sets out, in plain and intelligible language, its obligations under paragraphs 9.3 to 9.15;

9.18.2 publish that statement on and make it readily accessible from its Website (if it has one);

9.18.3 take all reasonable steps to inform each of its Domestic Consumers, at least once each year, of that statement and how to obtain it; and

9.18.4 give a copy of that statement on request and free of charge to any person.

Direct debits

9.19 Paragraphs 9.20, 9.21, and 9.22 apply where a Domestic Consumer pays the Charges by way of regular direct debit payments of a fixed amount (which amount may be varied from time to time in accordance with the relevant Domestic Supply Contract).

9.20 The authorised person must provide to each such Domestic Consumer an explanation in clear, plain and intelligible language of the basis which a fixed amount (and any variation of that fixed amount) has been determined.

9.21 The authorised person must ensure that the fixed amount of the regular direct debit payment is based on the best and most current information available (or which reasonably ought to be available) to the authorised person, including information as to the authorised person's reasonable estimates of the heating, cooling or hot water that has been or will be used at the relevant Domestic Premises.

9.22 Where any Consumer Credit Balance has accumulated under a Domestic Supply Contract and the relevant Domestic Consumer requests that the authorised person do so, the authorised person must, save where it is fair and reasonable in all the circumstances for the authorised person not to do so, refund to the relevant Domestic Consumer, in a timely manner, any such accumulated Consumer Credit Balance. Where the authorised person considers that it is fair and reasonable in all the circumstances for it not to refund any Consumer Credit Balance which has accumulated under a Domestic Supply Contract in accordance with this provision, it must inform the relevant Domestic Consumer of its view and of the reasons for holding that view.

110 Decision Heat networks regulation: authorisation conditions