Ofgem urged to speed up plans to prevent energy companies from holding on to an estimated £1.4bn in customer credit balances

“SWIFT ACTION” REQUIRED TO PREVENT SUPPLIERS FROM USING YOUR CREDIT BALANCES AS THEIR BANK 

Auto energy switch site Flipper is urging Ofgem to speed up plans to prevent energy companies from holding on to an estimated £1.4bn in customer credit balances. 

In March the energy watchdog announced proposals to ensure suppliers are “not holding on to more of customers’ money than absolutely necessary”. 

“I’m delighted Ofgem are looking into the matter, but with evidence of credit balances up to £1,000 to be returned, swift action required,” said Barry Hayward, managing director of Flipper. 

“Hoarding on to cash is real bugbear to bill-payers, especially now with consumers facing financial hardship due to covid,” said Flipper’s managing director Barry Hayward. 

“The retail energy market in Great Britain needs to be fair rather than money just being allowed to languish in suppliers’ coffers through overpayment. 

“If the regulator’s proposals are confirmed the rules would require suppliers to refund credit balances each year from 2022 but that will be too late for many people.” 

Households who pay their energy bills through a fixed direct debit can overpay during the summer – when less energy is used – and build up sizeable credit balances which reduce again in the winter. 

“Sadly, not all suppliers are forthcoming when it comes to refunds,” added Barry who heads up Flipper that analyses the market every month to deliver continuous savings to members. 

“Ofgem’s report said it feared the overpayment funds were being used to fund “unsustainable business practices”, which is unacceptable and shouldn’t be allowed to continue.” 

The UK’s Energy Ombudsman Ed Dodman has the problem of unrefunded credit balances accounted for more than 1,000 complaints to the body in 2020 alone. 

Consumer champions Which? Say if you are credit to your energy firm, you can request a refund at any time and your energy supplier must do so promptly, unless there are reasonable grounds not to.  

It will likely check whether your payments and credit will cover your predicted use over the next year, and require an up-to-date meter reading. 

Flipper has hundreds of thousands of members who pay an annual fee of £30 to be automatically switched to the best deal, with the fee only kicking in when savings are made.  

Auto-switching was introduced by Flipper with other websites introducing similar schemes. Unlike comparison websites auto-switchers are not paid by the energy providers so trawl the whole of the market and carry out the switch for you.  

Information on Flipper can be found at: www.flipper.community