Households could get £65 payout from energy suppliers under watchdog’s proposals – how to check if you’re owed cash

HOUSEHOLDS could be owed a £65 payout from energy suppliers under plans to roll out new rules to stop customers overpaying on their bills.

The energy regulator Ofgem wants providers to refund direct debit customers who have overpaid throughout the year.

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Over 21.3million – or 75% of – Brits pay for their energy by direct debit, according to Ofgem.

Direct debit customers pay the same amount every month, regardless of how much energy they use.

Instead, their bills are based on their estimated gas and electricity consumption.

But these customers often build up a credit balance – the amount that your energy supplier owes you – during the summer when less energy is usually used.

Suppliers will then take payments from this credit balance during the winter when energy bills typically rise again during colder weather.

But Ofgem says it is “concerned” that some suppliers may use any extra cash in customers’ balances to fund “unsustainable business practices”. 

The watchdog wants customers to be automatically refunded the extra cash after a year with their energy supplier.

According to the regulator’s research, customers overpaid as much as £1.4billion pounds to suppliers which was being held in credit balances as of October 2018.

It means on average, households would get a £65 payout under the new crackdown – but this hasn’t been confirmed yet.

At this stage, Ofgem is only proposing the plans.

After the consultation on the new rules ends in mid-May, the watchdog will decide whether to go ahead with the plans by the end of the year.

But if they’re given the green-light, they will be rolled out from 2022.

You don’t have to wait until then to find out if you’re owed cash from your supplier though.

Customers can contact their supplier now and ask for any outstanding credit balance on your account to be paid back to you.

The provider can only refuse on “reasonable grounds”, which it will have to explain to you, such as you’re actually in arrears.

Pre-payment customers can also check their meter reading to see if they are in credit with their provider.

For those who are in the process of switching suppliers, your current provider should send your final bill with the credit deducted, or refund the leftover credit to your bank account.

Uswitch head of regulation Richard Neudegg said the new rules would stop overpayments from getting out of control.

He said: “If a customer’s monthly bill is higher than it should be or the consumption is much less than expected, their supplier could be potentially hoarding hundreds of pounds of their money.”

Ofgem chief executive Jonathan Brearley said the new rules would ensure suppliers are not holding onto customers’ cash more than what is “absolutely necessary”.

“This is an important step in making the retail energy market fairer for consumers at a time when many are facing financial hardship,” he added.

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This post first appeared on thesun.co.uk