Direct debit payments rise even when bill-payers are thousands of pounds in credit, investigation shows.
Energy companies are hoarding nearly £2 billion of customers’ cash amid the cost of living crisis, The Telegraph can disclose.
Gas and electricity suppliers are raising customers’ direct debit payments even when they are thousands of pounds in credit, an investigation has found.
Some companies have been accused of using the money as a cheap source of finance whilst many British households struggle to make ends meet.
On Monday Christine Farnish, a former board member of Ofgem, the energy regulator, criticised the watchdog for allowing firms to behave in this way.
Writing exclusively for The Telegraph, Ms Farnish – who quit earlier this year in a row over changes to the way the energy price cap is set – said: “Energy firms are allowed to put their metaphorical hand into a customer’s pocket and use advance customer payments to fund their own businesses.
“It’s my guess that hard-pressed families have no idea that part of their energy direct debits are used to provide cheap financing for their supplier, rather than actually paying for energy consumed.”
Energy bills have nearly doubled over the last year, going from an average of £1,277 a year in Oct 2021 to £2,500 currently. The true cost is even higher, but is being held down by government support.
Read on…Energy firms hoard £2bn of customers’ cash