UK energy firms kept £400m when customers closed accounts

Big six thieves[/caption]The “big six” energy firms have been told to hand back more than £400m owed to customers when they switch accounts and forget to reclaim overpayments from regular monthly payments.

Credit left in customer accounts when people and businesses move or switch suppliers has accumulated over the last six years, energy regulator Ofgem said today on BBC Radio.

The energy regulator, which says its estimates are the minimum owed, has called the amount “unacceptably large”. Industry lobby group UK Energy claimed that it can be hard to trace customers who move, but did not deny that they never even try.

Ofgem thinks 3.5 million domestic and 300,000 business accounts are affected.

“When many people are struggling to make ends meet, it is vital that energy companies do the right thing and do all they can to return this money and restore consumer trust,” said Andrew Wright, chief executive of Ofgem.

“We want to see decisive action by suppliers, individually and collectively, to address this issue.”

Ofgem estimates the suppliers hold at least £202m from former domestic customers and at least £204m from old business accounts.

The regulator says it is investigating whether suppliers’ policies on returning money to customers comply with existing rules.

In cases where the money cannot be returned, the regulator expects companies to “find ways to use this money to benefit consumers more generally” and clearly explain what they have done with it.

The body that represents the suppliers, Energy UK, said returning credit balances can be difficult because some customers leave no new contact details when they move house, or they have no details of next of kin when people die.

It urged customers to keep their energy suppliers informed.

In a statement it added: “Energy companies try and make sure individual customers’ money gets back to its rightful owners. However, more commonly energy companies are owed many times more money by people who leave unpaid debts behind them.”

Ofgem’s call comes after most of the “big six” energy firms agreed to automatically refund direct debit customers when they are in credit.

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