ENERGY GIANTS IN CASH SWITCH SCANDAL
Customers’ money held for months
POWER companies have been slammed for failing to refund customers who switch to other providers.
Thousands of families are involved in long-running battles with suppliers to reclaim cash they’re owed.
It’s believed up to £150 million has been stockpiled, earning the Big Six hundreds of thousands of pounds in interest.
A senior MP on Westminster’s energy committee has vowed to grill energy chiefs.
ENERGY firms have been accused of swelling their mammoth profits by holding on to the cash of customers who have deserted them.
Record numbers of fed-up families switched providers this winter after enormous price hikes in October and November.
But a Sunday Post investigation has uncovered cases where customers have been involved in long-running battles with the firms to reclaim money they’re owed.
Experts say the cash held on to by energy companies could have totalled £150 million in the last year alone, earning them millions in interest.
Energy campaigners say government regulators are “asleep at the wheel” over the issue with advice groups saying it is a growing concern among consumers.
Now politicians are set to grill energy fat cats over the debacle when they appear at Westminster.
Labour MP John Robertson, a member of the Energy and Climate Change Committee who have previously hauled energy firm bosses into Parliament to explain their profits, said: “The companies could face big fines if this is shown to be happening.
“Making it hard for customers to switch and holding on to their balance is not acceptable.
“I will be asking energy bosses to explain themselves the next time they are in front of the committee.”
Around three million people in Britain switch their energy supplier every year — and it’s growing.
An incredible 150,000 Brits abandoned the Big Six in just one month last year to move to smaller providers.
Half of customers switching are believed to be in credit with their former provider by £100.
Mark Todd, director of comparison website Energyhelpline, said: “Ofgem should fine companies that hold on to people’s cash after they’ve switched. “I don’t know if some firms are doing it on purpose to earn money in interest, but I suspect they are.
“Some companies appear to wait until customers tell them their former accounts were in credit before doing anything about it. “I personally had to chase a former energy supplier for money they owed me after I switched. “I don’t think they’d ever have given me it if I hadn’t asked for it. It took three months before I got it back.
“I know of a lot of cases where companies took months to refund people.
“Some parents are struggling to feed their kids and yet energy companies are holding on to hundreds of pounds of their money.
“It’s a massive issue and extremely common.
Firms making millions in interest
“Our call handlers alone deal with about 100 complaints a week about this.
“It’s an easy issue for the regulator to fix— it’s about time they did.
“These are profit-making companies so if we don’t have strict rules on this then it will end up like the WildWest.”
Scott Byrom, of Power UK, who provide independent advice for consumers looking to switch energy suppliers, said: “We’ve heard of this happening regularly. I would say we deal with this issue on a daily basis.
“There are no rules at present to make suppliers pay customers any interest earned on money they were owed.
“I wouldn’t rule out cases of people who never got their money back because they didn’t realise they were in credit when they switched.
“Change is definitely needed in the industry.
“Suppliers should return overpayments quickly and on a regular basis.”
Last year UK Energy Minister Greg Barker said he reached an agreement with Britain’s Big Six energy firms that they would pay back cash they’d been hoarding from direct debit overpayments.
Energy firms said they would offer cash refunds automatically to customers if an account was in credit by more than one month’s payment.
However, Mr Byrom said the complaints advice agencies are dealing with suggest this still isn’t happening.
He said: “As far as I’m aware it was just an agreement with the energy firms rather something ingrained in law.
“The complaints we’re receiving suggest nothing has changed yet.”
Archna Luthra, spokeswoman for MoneySavingExpert. com, said: “Outrageously there are no robust rules in place which force firms to cough up cash that belongs rightfully in consumers’ pockets.
“How readily they refund once you’ve switched away depends on the firm.
“This is the type of issue that Ofgem, the regulator, really needs to flex some muscle on and ensure energy suppliers do the right thing.
“Money owed can be as much as a few hundred and if it takes you three months to get a refund that’s potentially a decent wedge of interest you’ve missed out on.”
Jo Ganly, energy expert at uSwitch.com, said its advisers had also dealt with numerous customers who had sought help in trying to get their money back.
An Ofgem spokesperson said: “Suppliers must refund credit that has built up in customers’ accounts if they ask for it.
“If suppliers think there are reasonable grounds for withholding credit, they should explain what these are to customers, who will then be able to challenge suppliers if they think they are wrong.
“If a customer has trouble getting a refund when switching supplier, we suggest that they first raise this through the supplier’s complaints process.
“If they’re not satisfied with the way the complaint is handled, they should get in touch with the independent energy ombudsman service.”
The energy ombudsman said they did not compile how many complaints were made on this issue.
Hannah Fensome, spokeswoman for industry umbrella group Energy UK, said: “When customers move supplier they can get their money back in full if they are in credit. This takes a little time as companies need to get final meter readings.”