Expert's warning over energy direct debits

Energy companies are increasing customers' direct debits ‘disproportionately’ to the looming price increases, a finance expert has warned.

Money Saving Expert founder Martin Lewis told MPs there are "worrying issues" over energy companies increasing customers' direct debits ahead of April's 54% increase to Ofgem's price cap – even for those in credit.

He told the Business, Energy and Industrial Strategy Committee: "There is no reason to double someone's direct debit when they're in credit and the price cap is going up 54%.

"That's not mathematically sound and it's a breach of licence conditions. A number of companies are doing it to improve their cash flow situation at the expense of their customers and I would like to see the regulator crackdown on that quite substantially."

He added: "It's important to remember that there is no competition in the market anymore. This is not a market. No one can switch."

He added: “It's right across the board with all companies.

"Consumers have to be wary.

"The amount of playing fast and loose that seems to be going on is huge right now. We need to crack down and we need to be much tougher with firms that do this."

Mr Lewis earlier said the Government's current package of measures to help those on the lowest incomes cope with energy bill increases is "not enough", adding: “It needs to give them more money. It really is as simple as that."

Gillian Cooper, head of energy policy at Citizens Advice, also told the committee that the Government's current energy bill support measures are "insufficient for the scale of the crisis we're facing".