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Ofgem criticises energy providers

Ofgem criticises energy providers

Category: Gas and electricity

Updated: 27/03/2009
First Published: 27/03/2009

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Energy companies have been told they must make significant improvements to their management of monthly direct debit payments made by customers.

The demand follows Ofgem's review of the direct debit arrangements of the UK's six major energy suppliers, which was conducted following complaints from consumers over the amount they were being asked to pay.

However, the report said that suppliers are not taking more money than is necessary from consumers. Research published by Which? this week said energy suppliers were taking unnecessarily high payments but Ofgem found "no evidence" to support the claim.

The regulator criticised providers for being unclear to the 40 per cent of the public who pay their bills by direct debit, with many unsure about the necessary level of payment they need to make to clear their tariff every month.

Ofgem chief executive, Alistair Buchanan, said: "Explanations of the payment increases and their practices on refund policies are wholly inadequate. Suppliers need to manage customers' direct debits payments much better, especially at a time when household budgets are under pressure."

Suppliers have also been ordered to adjust payments on a timely basis to avoid a rise in debt when prices are increased, as well as encouraging customers to provide accurate meter readings to ensure they are charged the correct amount.

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