Ofgem has called out a number of energy suppliers to take "immediate and urgent actions" after discovering a variety of weaknesses in the way customers are charged.
The energy regulator found that five suppliers - Ecotricity, Good Energy, Green Energy UK, Utilita Energy and TruEnergy - had moderate to severe weaknesses in their payment systems. This includes inadequate processes to an overall lack of a structured approach to setting customers' direct debits.
Energy suppliers have now been ordered by Ofgem to review the accounts of all customers whose direct debit was increased by 100 per cent or more between February and the end of April - this includes some 500,000 households. Furthermore, 17 large suppliers in the market were found to have minor issues in their systems.
Read more: Hundreds of police officers hit the road to 'catch bad guys' in cross-border crackdown
Suppliers with no significant issues, according to Ofgem, include British Gas, EDF, ScottishPower and So Energy. Those with minor weaknesses include Bubl, E.ON, Octopus Energy, Outfox the Market, Ovo, Shell and Utility Warehouse.
If any miscalculations are found to have taken place, then customers will receive a goodwill payment form Ofgem wherever appropriate. The review also found that more than seven million energy consumers on a standard variable tariff (SVT) saw an increase in their direct debit payments between February and April 2022 - mostly reflected in the increased cost of gas.
Ofgem chief executive Jonathan Brearley said: “We know how hard it is for energy customers at the moment so it’s crucial that the amount they pay each month in direct debits is right so they can manage their money. Suppliers must do all they can, especially during the current gas crisis, to support customers and to recognise the significant worry and concern increased direct debits can cause.
"We know there is some excellent service out there, but we want to make sure that it’s consistent and standard across the board. It’s clear from today’s findings on direct debits that there are areas of the market where customers are simply not getting the service they need and rightly expect in these very difficult times.
“Today’s findings show that, with the urgent changes we are now expecting, the current system will be much fairer for consumers. Bringing down the price of gas is not in Ofgem’s control; however, we will do all we can to have a fair system and ensure suppliers look after their customers.”
Dhara Vyas, deputy director of Energy UK, which represents suppliers, said: “Steep rises in energy bills have meant big increases in direct debit payments, which can also be triggered by changes in tariffs, high debit balances or an updated meter read. Given the situation, it’s right for Ofgem to check how suppliers are setting these.
“Suppliers are required to set direct debits at a level that allows the customer to pay the same amount each month, without running up too much credit and or getting into too much debt, basing this on each customer’s individual circumstances – taking into account factors like energy usage and record with previous payments.
“Doing this at a time when energy bills are rising rapidly can be challenging, so it’s important that all suppliers’ processes are as robust as possible so that customers can be confident these are being set fairly.”
Read next:
