Energy suppliers return £670m to customers but ‘still owe £1bn’
The regulator raised concerns back in 2014 that suppliers were holding millions of pounds in closed account credit balances from former domestic customers that they were not paying back.
Large suppliers have since paid back almost 90% of the cash, according to new industry data.
Most of the payments to these former customers were made within 14 days of a final bill being issued in line with the commitment suppliers made in 2014, Ofgem said.
Ofgem’s chief executive Dermot Nolan said: “Trust can only be restored in the energy market if consumers get good levels of service. So it is good to see the industry has made progress in returning consumers’ money when someone switches energy supplier. We will continue to monitor this area to ensure prompt payment to consumers is standard practice.”
Despite the progress, comparison site Gocompare.com said households should not allow large credit balances to build up on their account.
It cited the issues surrounding the recent collapse of GB Energy Supply, the first domestic energy supplier to close in ten years.
While Ofgem provides a safety net for customers should an energy provider go out of business, including ensuring customers will not lose any credit balance, Gocompare said “it’s likely households will become increasingly cautious about having large credit balances with their supplier”.
Research by the comparison site found millions of homeowners have a positive balance in their utility bills and are currently owed, on average, £86.60 by their energy supplier. Collectively, this means energy providers are profiting from £1bn in overpaid bills.