Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Energy firms shoring up finances at expense of consumers unacceptable – charity

Ofgem’s price cap increased by an average of £693 on April 1 for about 18 million households on standard tariffs (PA)
Ofgem’s price cap increased by an average of £693 on April 1 for about 18 million households on standard tariffs (PA)

It is “totally unacceptable” for energy firms to shore up their finances at the expense of consumers, watchdog Citizens Advice said as it welcomed Ofgem’s reviews of direct debits.

The charity, which is the official consumer watchdog for energy, said Ofgem “must make sure suppliers only increase payments for valid reasons”.

Some energy suppliers have been given a three-week deadline to explain accusations they have increased customers’ direct debit payments by “more than is necessary”.

Gillian Cooper, head of energy policy at Citizens Advice, said: “Given the pressures facing families, we welcome Ofgem’s review and hope it will provide reassurance to people worried about their bills.

“There are normally justifiable reasons for an increase to your direct debit – such as building up credit for the winter – but your supplier should always be able to explain why this has happened.

“Unfortunately, in the past we have seen some energy companies shore up their finances at the expense of consumers. This is totally unacceptable. Ofgem must make sure suppliers only increase payments for valid reasons.”

The watchdog said it saw a 42% increase in the number of people contacting its consumer service in March with general billing issues compared with the previous month.

Which? consumer rights spokesman Adam French said: “It’s encouraging to see that Ofgem has issued compliance reviews to energy suppliers who are increasing direct debits higher than they need to be.

“This action must translate quickly into fairer treatment for consumers – with many struggling to make ends meet during a relentless cost-of-living crisis, people cannot afford to be charged over the odds for essential services.”

Ofgem chief executive Jonathan Brearley recently said there were “troubling signs” of the tactic.

Mr Brearley had said in April that reviews were imminent, and Business Secretary Kwasi Kwarteng tweeted yesterday that Ofgem had issued compliance reviews.

Mr Kwarteng said that some energy companies had been increasing direct debits beyond what was required.

He wrote: “The regulator will not hesitate to swiftly enforce compliance, including issuing substantial fines.”

Money Saving Expert founder Martin Lewis warned MPs in March about “worrying issues” over energy companies increasing customers’ direct debits disproportionately to April’s 54% increase to Ofgem’s price cap, even for those in credit.

He told the Business, Energy and Industrial Strategy (BEIS) Committee: “There is no reason to double someone’s direct debit when they’re in credit and the price cap is going up 54%.

“That’s not mathematically sound and it’s a breach of licence conditions. I have been very concerned that a number of companies are doing it to improve their cash flow situation at the expense of their customers and I would like to see the regulator crack down on that quite substantially.”

An Ofgem spokesman said: “Our top priority is to protect consumers and we recently wrote to suppliers to alert them that we are commissioning a series of market compliance reviews to ensure, amongst other things, that they are handling direct debits fairly, and that overall, they are held to higher standards for performance on customer service and protecting vulnerable customers.”

A spokesman for Energy UK, which represents energy companies, said: “Suppliers are having to increase direct debit payments to reflect bill increases and are required to set them at a fair and reasonable level based on the customer’s individual circumstances – taking into account factors like previous energy use or record with previous payments.

“It’s right that the regulator is looking to ensure that suppliers are complying with those requirements. Customers who do have concerns with the level of their direct debit payments should contact their supplier.”

Ofgem’s price cap increased by an average of £693 on April 1 for about 18 million households on standard tariffs.

Mr Brearley wrote in a blog on Ofgem’s website in April that the regulator had received information from consumer groups and the public about “bad practices” by some suppliers.

“We are also seeing troubling signs that some companies are reacting to these changes by allowing levels of customer service to deteriorate,” he wrote.

He added that they were also concerned about “the way some vulnerable customers are being treated when they fall into difficulties”.

The regulator has powers to issue “substantial fines” of up to 10% of turnover to firms found failing to comply.

Already a subscriber? Sign in

[[title]]

[[text]]