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Energy firms set to refund customer overpayments

Energy firms set to refund customer overpayments

Category: Gas and electricity

Updated: 12/05/2017
First Published: 13/11/2013

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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 It is now over 6 months old so the content may be out of date.

Energy providers will no longer be able to hold onto the cash from customers' direct debit overpayments under new rules due to be implemented over the coming weeks.

Currently customers who pay their gas and electricity bills by setting up a direct debit arrange to pay a set amount each month, which does not change until their energy usage is reviewed by the energy company. This usually happens once a year.This means that in the summer months customers often overpay on what energy they are actually using in order to compensate for increased winter energy costs.

But in many cases this means over the year they are actually paying more than they need to, with the energy provider holding onto those excess payments until the customer requests that it be refunded to them.

Of course, energy companies will eventually refund customers at some point, but when this actually happens varies from supplier to supplier. Some firms, such as British Gas, refund customers once they are £100 in credit, while Scottish Power pays back customers when their overpayments reach the equivalent of three direct debit payments.

Under the new rules, however, suppliers will be required to automatically refund customers whose accounts are in credit by more than one month's payment.

What Next?

Five of the big six energy providers have now announced they'll be increasing prices ahead of winter - Compare tariffs now and save up to £320 by switching your energy supplier before it's too late.

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 Any products featured may be withdrawn by their provider or changed at any time.

 
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