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Reduction in energy customers 'debt-hopping'

One in five households were in arrears on at least one bill or loan in 2010
One in five households were in arrears on at least one bill or loan in 2010

The number of gas and electricity customers changing provider to avoid paying their bills has been reduced with the introduction of a new debt flagging system.

Meanwhile, new figures from the Central Statistics Office show that one in five households were in arrears on at least one bill or loan in 2010.

The St Vincent de Paul has said it is struggling to cope with the number of people looking for help with energy bills.

"Debt-hopping" involves running up a bill with one electricity or gas company and then switching to a new provider, leaving a massive unpaid bill behind.

The energy providers say it is a big issue, with Bord Gáis Energy saying debt hopping cost it €7m in 2010.

But the introduction of a new flagging system has reduced the numbers changing operators, as customers are flagged to the other companies as having left unpaid bills behind.

The new flagging system was introduced in the middle of October 2011 and has already resulted in a reduced number of people engaging in "debt-hopping".

Between November and the end of January, just under 3% of electricity customers and just under 1% of gas customers were flagged each month as trying to change provider without settling their unpaid bills.

Just under half of those flagged were prevented from changing supplier.

The St Vincent de Paul said there are an unsustainable number of people contacting it for help with gas and electricity bills.

It said people are running huge bills, often over €1,000.

SVP’s John-Mark McCafferty said it was unfair that a charity was being expected to bridge the gap between how much money people had and how much they owed for energy bills.

Mr McCafferty said the charity was struggling to cope with the number of people seeking its help.