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Consumer watchdog accuses suppliers of overcharging

Written by: Roger Milne | 25 June 2009

Consumer Focus claimed today that domestic energy customers are being overcharged by a combined £1.66 billion this year (£74 per household) because declining wholesale costs have not been fully passed on by suppliers. The big six gas and electricity companies have disputed this claim.
Analysis published by the consumer champion argued that current gas prices should be at least 7.4% cheaper (£60.10 annually), and electricity bills a minimum of 3.1% (£13.80) lower, if suppliers had fully passed on declining wholesale costs to consumers. The watchdog has called on suppliers to pass on these savings immediately.
Philip Cullum, deputy chief executive of Consumer Focus, said: "Consumers have feared for months that the big six suppliers might not have passed on the full cuts in wholesale energy prices, but the companies claimed to have acted fairly. Our new research for the first time shows the reality. The companies are pocketing £1.6 billion extra, while millions of households struggle to make ends meet".
Garry Felgate chief executive of the Energy Retail Association hit back, saying the consumer watchdog was being misleading and had ignored key facts on costs in reaching its conclusions.
He stated "The energy regulator, Ofgem has repeatedly looked at the issue of energy prices and have concluded there is no evidence of energy suppliers increasing prices faster than they reduce them. If Consumer Focus disagrees with Ofgem's conclusions, then their model and calculations should be made transparent and subject to scrutiny.
"Since the start of this year, all the major energy suppliers have reduced prices, and they are investing around £4 billion over the next three years in energy efficient measures - like free and low-cost insulation and home energy audits - helping their customers use less gas and electricity and cut their fuel bills."

Tags: Consumer Focus, energy retail, ERA

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  1. Eon are my current suppliers of both gas and electricity. I live in a 3 bedroom end terraced house with my son and we have occational guests. I pay Eon approx. £100 a month by direct debit and have paid this without fail. My meters only seem to get read about 2 times a year. On 30th June 08 my meter was changed by Meter Plus. My latest electricity bill states that I owe over £1000 to Eon and that my direct debit payments need to rise to over £450 a month. On phoning Eon they stated that they would allow me to spread the payments longer and that I could pay £275 a month. They did not think a mistake has been made with my bill. Are they correct? How could my bill rise so steeply with mainly only 2 people in my home when I pay £100 a month already. Do you think there may be a problem when the meter was changed in June last year?

    Andrew Emery | 10 July 2009, 06:26 AM

  2. If your energy company can't help with your complaint, the next step should be Consumer Direct, their website is www.consumerdirect.gov.uk

    Janet Wood | 13 July 2009, 12:46 PM

  3. I have a pre-payment meter and yet Scottish Power send me a cumulative bill, adding my current usage onto my oustanding debt surely that isnt right

    Garry Plant | 31 August 2009, 10:13 AM

  4. I need some urgent advice about my fuel bills which seem suddenly very enormous. N power have raised my direct debit from £40.00 per month to £400.00 which is extortionate particularly as my gas has not been on in the summer at all and in the winter just in the morning and in the evening for a couple of hours. I have emailed them to try and get them to monitor my gas and electric meters which have been in unchanged and unchecked for 15 years and have rung them also. I cannot get an answer on the phone, they leave me waiting and its an 0845 number. I do need some urgent advice about this. Linda

    Linda Cawley | 02 September 2009, 04:32 PM

  5. If your energy company can't help with your complaint, the next step should be Consumer Direct, their website is www.consumerdirect.gov.uk

    Janet Wood | 16 September 2009, 11:19 PM

  6. i have been with british gas about 30 years today i rang them regarding my duelfuel i have over payed them by £3oo on my electricity they still havet refunded me my over due money they stated i would have to to the end of nov 09 for there 6monthly review and have to carry on paying my requested bill

    eleanorperry5@googlemail.com | 13 October 2009, 03:32 PM