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Energy companies told to be more customer-friendly over direct debit payments
Energy regulator Ofgem has acted to force energy suppliers to provide more information to customers about their direct debit payments and justify holding credit balances.
The regulator was responding to a storm of protest over direct debit payments because energy companies were said to be holding on to huge overpayments by customers.
Ofgem has responded by forcing suppliers "to ensure payment levels are
clearly and accurately explained and based on the best available information". Suppliers will have to justify why they are holding onto credit surpluses built up by a
customer.
Alistair Buchanan, Ofgem chief executive, said: "we are concerned that if customers cannot clearly understand how their payment plan works they will lose confidence. The proposed licence condition will help give customers peace of mind that the amount they are being asked to pay is based on their likely energy use."
Audrey Gallacher, energy expert at watchdog Consumer Focus, said: "Consumers need the peace of mind that when they set up a direct debit for their energy they will only be paying for what they actually use. The measures announced by Ofgem today are an important step towards rebuilding confidence in direct debits".
Garry Felgate, chief executive of the Energy Retail Association, said: "Direct Debits are hassle free, straightforward and the payment method of choice for the majority of customers. All energy companies have signed up to a Commitment on Direct Debit Arrangements which means they will make sure their customers are happy with how their Direct Debit works, by explaining the refund process, explaining different payment methods and how customers' payment methods will be reviewed to match their energy use."
The Energy Retail Association has launched a guide to explaining direct debits and what customers should expect from their energy company, part of an initiative called '"Energy Made Clear":http://www.energy-retail.org.uk/documents/Direct_Debit_Leaflet_080809.pdf' which aims to make understanding energy bills easier - from explaining the advantages and disadvantages of different payment methods through to how to switch energy supplier. The campaign has been developed in consultation with Consumer Focus, Consumer Direct, Citizens' Advice Bureau and Bacs.
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