Energy companies will be required to provide a clear explanation to customers if they increase direct debit payments, under new rules.
Customers paying for gas, electricity or both by monthly direct debit will receive an explanation in ‘clear, plain and intelligible language’ of how their payments have been calculated – and, if the direct debit is increased, why this has happened.
The new rules, which come into force on 18 January, 2010, have been set by energy regulator Ofgem.
Direct debit payments
The rules also set out that direct debit payments must be calculated using ‘the best and most current information available’, including previous or estimated gas and electricity usage figures.
If credit accumulates on a customer’s account, should refund customers the money, unless there is a ‘fair and reasonable’ reason not to – in which case the energy company should contact the customer to explain why.
Which? research on direct debits published last year found that 64% of electricity accounts and 69% of gas accounts paid by monthly direct debit were in credit at their last bill or statement – and a quarter of those had built up credit of more than £100.
Alison Morrison, who runs our free price comparison site, Which? Switch, said: ‘Consumers will be reassured to know that they can expect a clear explanation from their supplier about how their direct debit payment is set. Any consumers unsure about how much they pay should contact their supplier to find out.’
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