Shapps caught out by ‘outrageous’ rise in energy bill direct debit
‘They are building up balances of hundreds of pounds of people’s money who can’t afford it’
‘Firms ringfencing credit balances would help keep prices down for customers’
THE Business Secretary has revealed that an energy company put up his direct debit payments by an “outrageous figure”.
Grant Shapps, shared concerns that gas and electric suppliers are raising customers’ bills even when they are in credit and told the House of Commons yesterday that he himself had fallen victim to this, when he was asked about the issue by an SNP MP.
Drew Hendry said: “Domestic energy companies are routinely raising people’s direct debits above the level of energy that they used and need to pay for. In the process, they are building up credit balances sometimes of hundreds of pounds of people’s money when they can’t afford it. Will the minister meet with me to discuss how to hold energy companies to account and ensure the automatic repayment of overcharging?”
Mr Shapps replied: “Well, I actually entirely agree with the honourable gentleman, and I’ve had the experience myself where the energy company just arbitrarily decides to put an outrageous figure into the direct debit, which once you challenge, they’ll fall back from ... if you can get through on the helpline.
“So I absolutely share his concern, and I’ll offer him a meeting with the energy minister to specifically deal with this matter.”
Last month, The Daily Telegraph disclosed that energy companies are hoarding nearly £2 billion of customers’ cash amid the cost of living crisis.
An investigation found gas and electricity suppliers are raising customers’ direct debit payments even when they are thousands of pounds in credit. Some companies have been accused of using the money as a cheap source of finance as many British households struggle to make ends meet.
A Government source said: “Ofgem has a very important role to play in helping consumers get support.”
They added that Mr Shapps intends to “work closely” with the energy regulator “to make sure suppliers are adhering to their responsibilities, and that Ofgem is properly scrutinising the current situation”.
Energy bills have nearly doubled over the past year, rising from an average of £1,277 a year in Oct 2021 to an average of £2,500 today. The true cost is even higher, but is being held down by government support.
Bills have surged as the war in Ukraine has led to higher prices for gas, which is used to generate about a third of Britain’s electricity.
A spokesman for Ofgem said: “Completely ringfencing credit balances would remove a large piece of working capital that would keep prices down for customers. Customers can still request their credit balance back from their supplier at any given time.”