Energy giants forced to pay compensation

ENERGY companies will be forced to pay customers compensation if switching to a new supplier goes wrong.

An automatic payout of at least £30 will be due if the switch takes longer than 21 days to complete, the industry regulator ofgem has announced.

The scheme, which will take effect before the end of this year, is designed to give the millions of households who have never switched their energy firm confidence to shop around.

These families will often be sitting on expensive standard variable tariffs which are more than £350 a year more expensive than the cheapest energy deals on the market.

As well as taking too long to switch a customer, compensation could also be triggered when suppliers are late in sending final bills or refunding credit balances to those who are leaving.

There will also be a payment if a customer is mistakenly switched to another supplier, known as an ‘erroneous transfer’.

The regulator is additionally working on how to speed up the switching process. It is aiming for householders to be able to switch within just one working day by 2020.

Alex neill, of consumer group Which? said: ‘Consumers find energy switching slow and difficult so introducing automatic compensation for when it goes wrong is welcome.’