The energy watchdog has announced moves to ensure customers paying for their gas and electricity by direct debit get a fair deal.
Ofgem plans to introduce new obligations on energy suppliers to ensure consumers’ direct debit payments are set accurately and are clearly explained to consumers.
Energy direct debits
The group launched a review of the way the six major energy suppliers set their direct debit charges following complaints from consumers over significant increases in the amounts they were being asked to pay each month.
The new condition in suppliers’ licences will mean they must ensure payment levels are clearly and accurately explained, and that they are based on the best information available. The new rules are due to be launched ahead of this winter.
Energy firms will also need to be able to justify why they are holding on to money paid by consumers over and above what is needed to cover their energy usage.
In a separate move, Ofgem also launched its final consultation on a package of measures designed to ensure the energy market is fair to all consumers.
The measures include tougher rules on doorstep sales, better information for customers on their energy bills and new annual statements setting out energy usage and how much it is costing households each year.
Clearer energy bills
Which? policy adviser Dr Fiona Cochrane said: ‘It’s good to see that we will finally have the name of our tariff on our bills and we welcome tougher rules on doorstep marketing and the build up of direct debits.
‘But what is Ofgem doing to address baffling tariffs? Surely they can’t ignore the 70 per cent of consumers who told them that they are confusing?
‘Ofgem’s initial report showed a robust analysis of the problems and solutions but the regulator seems to have lost the energy to deliver on them.’
Which? is calling for simpler bills and minimum standards for tariffs, of which there are currently more than 4,000 available to UK consumers.
People switching their gas and electricity to a dual fuel tariff through Which? Switch saved on average £257 on their annual energy bills last year. Which? Switch also features the results of the Which? Utilities Satisfaction Survey – giving a picture of how customers rate their energy suppliers’ service.
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