Energy firms told to take 'immediate action' after Ofgem finds severe direct debit issues
13 July 2022, 12:56
Energy watchdog Ofgem has told suppliers to take "immediate and urgent action" over the way they charge customers through direct debit.
It has found severe to moderate weaknesses with five suppliers - Ecotricity, Good Energy, Green Energy UK, Utilita Energy and TruEnergy.
Problems ranged from inadequate processes to a lack of a structured approach to setting the direct debits.
Energy firms have two weeks to submit action plans outlining how they will deal with the problems, and Ofgem expects suppliers to adjust any miscalculations, including through repayments.
A goodwill payment should also be considered if necessary.
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."
Minor weaknesses were found at Bulb, E.ON, Octopus Energy, Outfox the Market, Ovo, Shell and Utility Warehouse, while no significant issues were found at were British Gas, EDF, ScottishPower and So Energy.
UK Energy Incubator Hub was also found to have had severe weaknesses but it has since folded.
Ofgem has told all suppliers to review the accounts belonging to customers who saw their direct debit rise by 100% of more between February and the end of April, as the global energy crisis saw prices soar and consumers left squeezed by growing bills.
That bracket represents about 500,000 households. On average, direct debit levels on a standard variable tariff saw an increase of 62% in that period.
