Energy firms to pay back billions: Windfall for customers as Big Six finally agree to refund direct debit overpayments after pressure from the MoS... People not always refunded credit on their account after switching provider Companies were making up to £36million a year in interest, MoS revealed Big Six conceded to repay customers and review accounts twice a year Energy Minister Greg Barker said news is a real win for working people Energy giants are to repay customers up to £2billion which they have stockpiled from direct debit overpayments. In a move hailed as a victory for The Mail on Sunday, beleaguered bosses of the ‘Big Six’ power companies agreed to the climbdown after a crunch summit with Ministers. The deal means any customer who is in credit by more than one month’s payment will be given an automatic refund, and comes two weeks after this newspaper exposed how the companies were making up to £36million a year in interest from accounts in credit, leading to accusations of profiteering. Energy Minister Greg Barker said last night: ‘This looks like a real win for hard-pressed working people. Thanks to the pressure from The Mail on Sunday and consumers up and down the country, we have together been able to get a better deal without having to resort to the blunt instrument of legislation, which means these changes should be in place by this winter.’ Energy firms have also pledged to review customers’ accounts twice a year to stop people amassing huge credit. More than 13million households pay a fixed amount every month by direct debit, with many overpaying in the summer when usage is lower. It has led to huge credits on consumer accounts, earning interest for the energy companies. The new initiatives, which are still to be agreed, will be a welcome relief to millions of households facing inflation-busting price hikes in fuel bills. A well-placed industry source said the Big Six had conceded they needed to act and had agreed ‘in principle’ to creating a best practice across the industry to tackle the issue. The source said that under the plans, twice yearly checks of customers’ accounts would reveal those who are paying too much. The suppliers would then offer customers the choice of having their money back or leaving the money in the account. The source said: ‘Companies are looking at how to implement this. It may not be triggered by an amount, but by how much a customer spends each month. If an account has more than one month’s money in credit, then it will be flagged up. Mr Barker added: ‘I had a very frank and candid meeting with the Big Six last week; it was cards on the table time. ‘I’m very pleased to report that we appear to have made real progress for consumers. There’s still detail to be agreed and I will not rest until we have scored a better deal for all energy consumers.’ Jo Ganley, an energy expert at price comparison website uSwitch, said suppliers need to reassure customers they won’t be sitting on their money. She said: ‘Establishing a blueprint for best practice – whereby all suppliers will review their customers’ accounts at least twice a year with a view to refunding any overpayments – seems like a sensible solution. It means that consumers will know exactly where they stand.’ Richard Lloyd, executive director of consumer group Which? added: ‘With trust in the energy market at an all-time low, companies must quickly deliver on this commitment to promptly refund consumers who are in credit with their direct debit accounts. ‘As Which? told the Minister and the Big Six suppliers, some energy companies already automatically refund even very low credit balances, so there’s no reason why the entire industry can’t follow suit. All companies need to play fair and charge more accurately.’ Research by Which? in 2012 said the energy giants enjoy a £1.2billion surplus each year from customers who are in credit – which they are then free to invest for an annual return of up to three per cent. But industry experts said the number was closer to £2billion. Four of the Big Six have announced price rises on dual-fuel bills. Npower is raising its bills by 10.4 per cent from next month. SSE customers will pay 8.2 per cent more from this Friday and British Gas prices go up by 9.2 per cent on November 23. Scottish Power customers will pay an extra 8.6 per cent from December 6. EDF has said it will not raise prices before January. E.ON has refused to rule out an imminent price rise. A spokesman for Energy UK, the industry trade association, said: ‘The Mail on Sunday has raised a very important issue. We are looking at this closely with our members.’ ...and green levies WILL be shown on your bill Families will be able to see how much they are paying in green taxes on their fuel bills, under new plans being considered by Ministers. A senior Whitehall source said Conservative peers were looking at amending the Energy Bill so power firms will be forced to include details of how much environmental initiatives are costing each consumer on every bill. The source said: ‘This will make green levies more transparent for customers who will be able to see how much of their bill is made up of green levies and taxes. Already pressed: Recently announced price hikes will add £50 to every familys bill - even £100 in some casesTories in the Lords are pushing for an amendment to the Bill, which is in its final stages. Conservative Ministers are sympathetic but it is yet to be agreed by the Liberal Democrats.’ Jo Ganley, an energy expert at comparison website uSwitch, said: ‘Telling consumers how much the additional green levies add up to would provide far greater transparency and could mean that they are better able to judge the fairness of future price increases for themselves.’ Richard Lloyd, executive director of consumer group Which? said: ‘We have called for a clear and consumer-friendly graphic on annual energy statements to show all the costs that make up our energy bills. ‘While this would be helpful, it won’t help the millions of hard-pressed households that are worried about getting into debt or cutting back on their heating this winter. ‘Consumers need to see that the Government is delivering more radical changes. The Government must show how it is getting under control all the energy policy costs that are being added to people’s bills.’ ________________________________________________ dailymail.co.uk/news/article-2496051/Energy-firms-pay-billions-Windfall-customers-Big-Six-finally-agree-refund-direct-debit-overpayments-pressure-MoS.html [Delighted: Energy minister Greg Barker praised the announcement as a real win for hard-pressed working people]
Posted on: Mon, 11 Nov 2013 09:56:59 +0000
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