Auto-switching power schemes accused of inflating bills

Thousands of households may have been unwittingly forced on to more expensive energy tariffs by so-called “auto-switching” services, it has emerged.

Some 20,000 households have been moved to another supplier without their knowledge and some are unable to revert to their original provider, a report submitted to Ofgem claims.

The regulator has come under pressure to crack down on auto-switching firms that have been accused of taking advantage of falling energy costs to boost profits by charging consumers up to £90 commission to switch them. Ofgem has said it is “carefully considering” the report’s findings.

The popularity of auto-switching platforms, which automatically move customers to the cheapest available tariff, soared before the 2021 energy crisis. Customers pay either a monthly fee for the service, or the platform bakes in a commission by charging customers more for power than they would have had to pay if they had signed up with a supplier directly.

Many of the platforms suspended their services after wholesale costs surged above the energy price cap. But thousands of customers have remained signed up to the services without their knowledge, according to a report by Octopus Energy.

Alexander Stafford, MP for Rother Valley and a member of the energy security and net zero committee, called for auto-switching to be regulated. He said: “Just as energy prices look to be returning to pre-Ukraine war levels, I am disgusted to find auto-switching firms are taking this opportunity to gouge money from hard-working customers.

“Ofgem must do more to protect families from this kind of exploitation, there is a clear need for the regulator to move quickly and use the powers given to it by Parliament to stop these profiteers now.”

Octopus said it has received thousands of complaints from customers who only discovered they had been switched to another supplier after they received a bill.

Typically only one in 20 customers who switch providers later changes their mind, but concerns were raised after around 50pc of switchers cancelled moves made in March.

The supplier said that the majority of customers had no recollection of having registered with an auto-switching service and did not know why they had been switched.

Many of these customers had signed up for the platform years ago but had not heard from the company in several years. The report noted that “often their view is that consent had expired”.

Others were tenants of properties where the meter had been registered to a switching company by a previous occupier. In some cases, customers were unable to cancel the switch because the supplier was too inundated with calls to respond in time, Octopus’s report said. Based on its own share of the energy market, Octopus estimates that overall some 20,000 households were switched without their knowledge this year.

Mr Stafford said: “These firms are clearly acting against the wishes of customers who are powerless to stop [them] ripping them off. Ofgem must work fast to protect households.”

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