Your gas and electricity supply won't be cut off. There will continue to be supply as normal and Ofgem will move you to a new supplier as part of a 'safety net'.
This new supplier is called the ‘supplier of last resort’ and is chosen by Ofgem through a ‘competitive’ process.
It’s likely that your old tariff will end and you will be set up on a special ‘deemed’ contract - this means a contract you haven’t chosen - with your new supplier.
This contract can last until you change it. However, in 2018 some companies honoured customers’ existing tariff prices so it’s important to check what tariff you’re on.
Take a meter reading as soon as possible to track how much gas and electricity you used with your old supplier. Keep it safe as you will need to give it to the new supplier.
According to Ofgem, it's likely your energy bills will go up as 'deemed' contracts are usually more expensive.
Also deals sold by firms which have stopped trading have often been cheap in order to attract customers to join them. So there could be quite a big price difference between your old and new suppliers’ tariffs.
Once you have been contacted by your new supplier, you should ask it to put you on its cheapest deal.
You won’t be charged exit fees if you decide to go with a different supplier to the one Ofgem has chosen for you.
Ofgem has told us that customers do not need to worry about cancelling their direct debit.
If you are in credit the energy supplier should not take any direct debit payments from you.
If you are in debt and owe money to the energy supplier then any direct debit payments will be taken as normal.
You should wait until you are contacted by your new supplier which will help you set up your new account and explain how it will arrange your direct debit payments.
If you’ve already cancelled your direct debit wait until your new supplier has got in touch with you. It will help you set up a new account and payments.
Your new supplier will pay back the outstanding credit you may have.
Once Ofgem has appointed the new supplier, it will contact you to explain how this will work.
Usually your credit will be automatically added to your account with the new supplier.
It's a good idea to take a meter reading and a note of your balance with the failed energy supplier so that you have it ready when your new supplier gets in touch with you.
If you switched away from the supplier before it stopped trading, you should still be able to get your credit balance back.
Ofgem said it looks to choose a supplier which will pay back money due to customers who have switched.
This is often paid back by cheque. This is because you haven't been a customer of the new supplier so it may not have your payment details.
This depends on what your new supplier agrees with your old supplier’s administrators.
If your new supplier has arranged to take on the customer debt of your old supplier, you will need to pay back the debt to your new supplier.
If this has not been arranged, you won't have to pay your new supplier any money you owed to your old supplier.
However, you may still have to pay it back your old supplier or their administrator.
Your new supplier will explain to you how any repayments will work.