Energy direct debits ‘interest-free loans’ - Gas and electricity - News - Moneyfacts

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Energy direct debits ‘interest-free loans’

Energy direct debits ‘interest-free loans’

Category: Gas and electricity

Updated: 26/03/2009
First Published: 26/03/2009

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 It is now over 6 months old so the content may be out of date.

Energy firms are effectively using their customers' money as 'interest free loans' by taking unnecessarily high payments each month, a consumer group has reported.

Four in five people questioned by Which? said they paid their energy bills by direct debit and that they were in credit by an average of £74 for electricity and £84 for gas.

A quarter of those in credit said they were owed £100 by their providers and eight per cent more than £200.

The findings follow a survey that found direct debits being set too high was the most common complaint with energy suppliers, which is one of the lowest performing sectors of industry when it comes to customer satisfaction.

"It seems incredible that energy companies can take hundreds of pounds more than they need from their customers, and profit from the interest that this money will earn at our expense," said Martyn Hocking, editor at Which? Money.

"While a small amount of credit built up over the summer months can be used up during the winter, it's difficult to see how a £200 credit will be used up - particularly as the customer makes the same payment each month."

Energy regulator Ofgem is expected to deliver a report soon following. a review of complaints.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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