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Are energy customers being ripped off?

Are energy customers being ripped off?

Category: Gas and electricity

Updated: 05/02/2014
First Published: 05/02/2014

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

MPs have accused energy companies of "ripping off" customers who don't settle their bill by direct debit, with Government figures revealing that cash or cheque payers typically have to fork out £114 more per year than those who make payments automatically.

Energy companies have responded by saying that those charges are to cover the higher costs involved in processing cash or cheque payments, a claim that's been rebuffed by the 200 MPs that have signed a House of Commons motion which calls for an Ofgem enquiry and for charges to be capped at £2 per month.

The motion, led by Conservative MP Robert Halfon, states that 45% of energy customers don't pay by direct debit and that increased charges for paying by cash hit pensioners and the poorest members of society the hardest, with a lot of people not having access to a bank account. This, argues Mr Halfon, means these charges amount to a "stealth tax on the poor".

It's hoped that the motion will encourage action, but unfortunately it could take some time for charges to be pushed down. So, if you're stuck paying those higher costs just what can you do? Well, if setting up direct debits isn't appropriate, comparing energy suppliers is a must.

Not all will charge such hefty amounts for making cash or cheque payments so it's worth taking a close look at their terms before you make your decision, and if you pay by quarterly bill make sure to plan ahead by regularly putting money into a savings account so those costs don't eat into your budget too much.

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