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Can you switch energy suppliers if you owe money?

Can you switch energy suppliers if you owe money?

When it comes to switching energy supplier when you’re in debt, there are a few different variables to consider. There are several reasons people in debt may want to change providers.

You may wish to switch because you’re not happy with the price or service you’re receiving or you may be thinking about leaving your supplier because you’re unable to pay. Let’s look at some of the scenarios. 

Will your current energy supplier let you leave without paying?

If you’re looking to switch providers when you owe money on your energy account, you may have trouble on a number of fronts. Your current provider is legally able to pursue you for what you owe them and may use a debt collector to do so. You cannot switch to another provider and wipe your debt, but in some circumstances, you may be able to change to another provider and still pay off your past bills to the other provider. 

If you’re having trouble paying, a better course of action is usually getting in touch with the company’s hardship team. Sometimes an arrangement can be made to pay down your outstanding bills. The Australian Energy Regulator (AER) brought into effect the Customer Hardship Policy Guideline in 2019. Under this, energy retailers must mandatorily provide customers who are struggling to pay their energy bills with more flexible payment plans and options.

If you feel that your consumer rights have been violated, you can also get in touch with the Energy Ombudsman. 

Will a new provider take you on if you have missed payments in the past?

Energy retailers can check your credit history and if it’s not clean, you may be charged a higher rate or have trouble signing up to some new provider. That being said, if you live in a state or territory with multiple providers, you can call a new retailer and ask whether they’ll let you move across. Often if you meet their terms and conditions, previous debt is not a barrier to a new contract.  

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This article was reviewed by Kate Cowling before it was published as part of RateCity's Fact Check process.



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