Energy suppliers warned of hikes in direct debits

Customer looks at a utility bill

The energy regulator said it had seen “worrying signs” that suppliers may have increased direct debit payments “more than necessary”.

Ofgem said it was concerned that companies could direct their customers to energy deals that are not in their “best interest”.

This comes as households face significant increases in their energy bills.

On April 1, annual bills rose by an average of £693 for around 18 million households at standard rates.

And some 4.5 million prepaid customers saw an average increase of £708 – from £1,309 to £2,017.

Energy experts have encouraged customers to take and submit meter readings as the changes take effect, in a bid to save money.

Jonathan Brearley, chief executive of Ofgem, said the regulator had received reports from consumer groups and the public about “bad practices” by some providers.

“We are also seeing troubling signs that some companies are reacting to these changes by allowing customer service levels to deteriorate,” he said. wrote in a blog post on the Ofgem website.

He added that they were also concerned about “the way certain vulnerable customers are treated when they encounter difficulties”.

“Considerable” fines

Mr Brearly said Ofgem was planning a series of reviews and ‘tougher scrutiny’ of energy companies, over concerns that suppliers had increased direct debit payments ‘more than necessary’, or directed customers to tariffs which “may not be in their best interests”.

The regulator said it would impose “substantial fines” on companies that fail to comply with the measures.

Energy bills have risen because the energy price cap – the maximum price suppliers in England, Wales and Scotland can charge households – is being raised.

Energy companies were able to increase their bills by 54% following the introduction of the new cap on April 1.

The price cap is reviewed every six months and prices are expected to increase further in October.

A report from Investec bank warned that bills could reach £3,000 a year.

Experts encouraged people without smart meters to submit gas and electricity meter readings on March 31 to ensure they had recorded the use of cheaper energy tariffs before the changes took effect. take place on April 1.

If you are unable to submit your readings, you must take a photo with the meter reading and meter serial number clearly visible to submit at a later date.

It’s also worth noting that recording an additional reading to give a more accurate picture of your energy consumption could see your bills increase if they are higher than your company’s forecast.

What help is available?

People struggling to pay their energy bills can seek advice from charities such as Advice to citizens, Turn2Us or the Stage change debt charity.

All major energy companies also have hardship funds that can offer assistance if someone is struggling to pay.

The government said he will offer additional help worth a total of £350 via the council tax system in England as well.

the warm house discount program will also be extended to cover three million homes. It gives low-income households a one-time annual rebate on their electricity bill and was worth £140 in 2021-22.

Graph showing how the energy price cap has changed

Graph showing how the energy price cap has changed

In October, customers in England, Scotland and Wales will receive a £200 rebate on their energy bills. They will have to repay this at £40 a year for five years, starting in April 2023.

Northern Ireland’s energy market is separate, but the government has said £150m will be available to support households.