Ofgem warns UK energy suppliers over unjustified increases in direct debits

The UK’s energy regulator will investigate whether some electricity and gas suppliers have raised regular household directive payments by ‘more than necessary’.

Jonathan Berrley, CEO of Ofgem, said the regulator has identified “disturbing signs” that suppliers are allowing customer service to “deteriorate” as the cost of energy bills rises.

Earlier this month, energy bills for the 22 million non-fixed-term households rose by 54%, with the UK “price ceiling” raised to just under £ 2,000 a year per household on average. As a result, suppliers will significantly increase the amount charged to customers who pay by standing order.

Barley said the regulator has been alerted by consumer groups and members of the public to “bad practices” by some vendors, including increasing regular standing orders by “more than required” and encouraging customers to sign up for new pricing deals that “may not be in their favor.”

Ofgem has issued a standing order warning, as Cornwall Energy, a reputable consulting firm, expects energy bills to remain high in 2024 as well, which will put further pressure on households struggling with the cost-of-living crisis.

Cornwall Insight said it expects the UK’s energy price ceiling to rise to more than £ 2,600 in October, when it is expected to be changed by the regulator, but may remain above £ 2,200 next spring and winter.

Ofgem has not speculated why vendors may raise direct debit above reasonable levels, but in the past companies have used customer funds to increase working capital. Since the beginning of 2021, more than 30 vendors have collapsed Hundreds of millions of pounds With customer credit with them.

“We have also seen disturbing stories about how some vulnerable clients are treated when they run into difficulties,” Berrley wrote in Blog Posted on Ofgem’s website on Thursday.

Berrley said the regulator will conduct a series of reviews to see if suppliers meet their license terms, which will include “strict supervision” of how the standing order is handled.

Berrley warned that if suppliers were found not to meet the required standards, Opgam “would not hesitate to take prompt action to enforce compliance, including the issuance of significant fines.”

Also the regulator Publish a letter Describes its recent plans to force energy suppliers to set customers’ credit balances.

Several larger suppliers, particularly Centrica, have led calls for them Separate customer money For bank accounts or various financial vehicles. However, some smaller companies opposed protection proposals, warning that it would threaten their viability.

Ofgem has admitted that appropriate “transitional arrangements” will likely be needed to allow all companies to comply with any new protection requirements, which it will consult later this year.

“There is no excuse to take customers’ money in advance and not keep it safe on one side,” Centrica CEO Chris Ushia said in response.

Ofgem warns UK energy suppliers over unjustified increases in direct debits Source link Ofgem warns UK energy suppliers over unjustified increases in direct debits

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