New figures from Ofgem show that energy firms in the UK held over £8.1 billion in overpayments at the beginning of 2023. Many households make set monthly payments, accumulating credit in the summer to cover higher winter bills. Companies are legally able to hold those overpayments. However, MP Angus MacNeil has accused them of holding too much. Energy UK, which represents firms, states that direct debits are based on forecasts created during times when prices were volatile. But customers do have the right to request refunds.
Dan Malcolm, a father-of-three from Dunfermline, built up £1,100 of credit with his supplier in September 2022. It took six weeks and multiple phone calls to retrieve £800 of that credit. Although energy companies claim that the money belongs to their customers, they can make it difficult for those customers to access the funds.
Many customers are not aware of a large credit balance or are unsuccessful in their requests for refunds. Ofgem believes this is not acceptable behaviour from suppliers. Energy UK believes energy companies holding onto people’s money can be helpful. Consumers keep payments flat in the summer intentionally to build up credit on their accounts. That credit is spent in the winter when bills are higher and consumers stay paying the same monthly amount, smoothing out bills.
Ofgem has strengthened rules regarding direct debits so that excess accumulation of consumer credit balances should be prevented. The regulator has stated that suppliers should base their direct debits on the most accurate available information. If customers are not happy with their treatment or the problem is not fixed in eight weeks, they may complain to the Energy Ombudsman. Energy is regulated differently in Northern Ireland, where NIAUR oversees utilities
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