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Consumers owed £1.5 billion by energy firms

  • 20/04/2016
  • Author:MartinKitara

The average household could be owed £132 by their energy supplier

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11 million British households (42% of all homes) are owed almost £1.5 billion by energy suppliers, according to a new survey by comparison website uSwitch.com.

The findings come as the UK experienced the third mildest winter since records began; meaning millions of customers paying by direct debit used far less energy than they paid for.

uSwitch found that the average household in credit could be owed £132 from their supplier and almost one in ten (9%) of households could reclaim credit of more than £200. Almost three-quarters (72%) took some action to reduce their energy usage during the mild winter by turning down their thermostats and radiators.

According to the survey, despite so many households building up credit over the winter, 13% of consumers – over 3.5 million – say they are in debt with their supplier.

Research by Turn2us last year found that one in two low income households are struggling to afford their energy costs, despite being in work. Amongst the hardest hit are people with disabilities, with over two in three (67%) reporting their struggles, and families, with almost two-thirds of working parents (65%) unable to meet these costs.

Around three in five homes or 16 million, pay their bills by fixed direct debit. The suppliers examine previous consumption to estimate how much customers will spend over the coming year. The bill is then split into monthly or quarterly payments.

Campaigners have urged the energy suppliers to issue refunds to customers whose accounts have been left in credit. Under Ofgem guidelines the energy firms can hold the funds until the customers ask for them.

uSwitch is advising customers who are unsure about the status of their account after the winter to check their electricity and gas meters, submit up-to-date readings and find out if they are in credit. Some suppliers automatically refund credit balances once a year but this may be subject to a minimum amount and refund policies vary between suppliers.  

"Providers must repay any credit upon request"

Tom Lyon, uSwitch.com energy expert, says: “After one of the UK’s mildest winters on record, millions of consumers may well have paid out hundreds of pounds for energy they simply didn’t use. Under Ofgem rules, providers must repay any credit on request, so now is the time to read your meter, update your account and reclaim what you’re owed.

“Today’s findings underline why providing regular, up-to-date meter readings is so important – it’s the only way to make sure you only pay for what you use and avoid the risk of falling into significant credit or debt. For anyone who finds themselves in debt, we recommend talking to your supplier about managing your account now to prevent the situation deteriorating any further.”

Customers being taken for granted

Energy companies recently came under fire for failing to pass on wholesale prices to families.

Roger Whitcomb, Chairman of the recent energy market investigation said: “We have found that the six largest suppliers have learned to take many of their existing domestic customers - some 70% of whom are on ‘default’ standard variable tariffs – for granted, not just over prices, but with their service and quality.”

What help is available if you are struggling with energy costs?

If you are struggling to pay your energy bills, the Energy Schemes section of our website has information on the various schemes and grants that may be available to help towards the cost of energy.

If you are struggling financially, you can use our Benefits Calculator to check your entitlement to benefits and our Grants Search to see if you are eligible for help from a charitable fund, based on your personal circumstances and needs.

The Your Situation section on our website contains information resources on benefits and grants and a Find an Adviser tool to help you find face-to-face advice in your local area.

Source: uSwitch press release: Energy suppliers could owe consumers £1.5 billion after third mildest winter on record

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