Energy firms shoring up finances at expense of consumers ‘unacceptable’
IT is “totally unacceptable” for energy firms to shore up their finances at the expense of consumers, watchdog Citizens Advice said as it welcomed Ofgem’s reviews of direct debits.
The charity, which is the official consumer watchdog for energy, said Ofgem “must make sure suppliers only increase payments for valid reasons”.
Some energy suppliers have been given a three-week deadline to explain accusations they have increased customers’ direct debit payments by “more than is necessary”.
Gillian Cooper, head of energy policy at Citizens Advice, said: “Given the pressures facing families, we welcome Ofgem’s review and hope it will provide reassurance to people worried about their bills.
“There are normally justifiable reasons for an increase to your direct debit – such as building up credit for the winter – but your supplier should always be able to explain why this has happened.
“Unfortunately, in the past we have seen some energy companies shore up their finances at the expense of consumers. This is totally unacceptable. Ofgem must make sure suppliers only increase payments for valid reasons.”
The watchdog said it saw a 42 per cent increase in the number of people contacting its consumer service in March with general billing issues compared with the previous month.
Which? consumer rights spokesman Adam French said: “It’s encouraging to see that Ofgem has issued compliance reviews to energy suppliers who are increasing direct debits higher than they need to be.
“This action must translate quickly into fairer treatment for consumers – people cannot afford to be charged over the odds for essential services.”
Ofgem chief executive Jonathan Brearley recently said there were “troubling signs” of the tactic.
Mr Brearley said in April reviews were imminent, and Business Secretary Kwasi Kwarteng tweeted yesterday that Ofgem had issued compliance reviews. Mr Kwarteng said some energy companies had been increasing direct debits beyond what was required.