As Ofgem confirms it has bullied the big energy providers into finally returning £670m of customer money owed since 2014, leading energy comparison site Gocompare.com has warned households to remain vigilant and not allow large credit balances to build up on their account.
In 2014, Ofgem challenged large suppliers to do more to return money to former customers who had credit on their account after their account was closed, typically after switching supplier. The regulator says that today, most customers are refunded within 14 days of final bill being issued.
The issue of credit balances was also highlighted by the recent collapse of GB Energy Supply - the first domestic energy supplier to close in ten years. Ofgem, the energy regulator, provides a safety net for customers should an energy provider go out of business, removing any risk to your supply, or the likelihood of any financial loss. This includes ensuring consumers will not lose any credit balances. However, despite the safeguard in place, it's likely households will become increasingly cautious about having large credit balances with their supplier.
Gocompare.com's own research reveals that millions of homeowners with a positive balance on their utility bills are currently owed, on average, £86.60 by their energy supplier. Collectively, this means energy providers are profiting from a whopping £1billion in overpaid bills*.
According to Gocompare.com Energy, 66% of homeowners have a positive balance on their gas and electricity bills. While on average homeowners have overpaid their bills by £86.60, a quarter of those surveyed have a credit balance in excess of £100.
Ben Wilson from Gocompare.com Energy commented: "The big six energy suppliers have direct debit policies that cover refunds. While each company's policy differs slightly, automatic credit refunds are typically made at the review date for balances of over £5 where an accurate meter reading has been supplied. However, customers who have built up a credit balance are entitled to ask for it at any time and providers are obliged to refund overpayments unless there are reasonable grounds for withholding it.
"In reality, the onus is totally on the customer to push for a refund as the automatic review process often only happens once a year and is dependent on your provider having a meter reading. Customers can request a 'manual credit refund' at any time, but again, it will require a meter reading and often you need to insist on a refund or ask for your direct debit to be reduced. If you think your direct debit payment has been set too high, contact your supplier, tell them your meter reading and ask them to review the arrangement based on your actual usage.
"When you move home or switch energy provider, make sure you speak to your existing provider and understand their refund process and the time it will take to receive the funds.
Ben Wilson continued: "I expect that the GB Energy collapse will encourage more consumers to tackle their provider if they see a significant credit amount build up on their account, however, customers should be reassured by Ofgem's safety net."
For more help on understanding your energy bill or switching your energy supplier see Gocompare.com's dedicated guide.
Notes to editors:
*£1bn calculation based on: 66% of homeowners in credit on their energy bills. According to the ONS (2015) there are 28 million households in the UK of which 17.7m are owner-occupied as opposed to rented. 66% of 17.7m is 11.7m. 11.7m x £86.60 is £1.01bn.
**On 30 September 2016, Bilendi conducted an online survey among 1,283 randomly selected British adults who are Maximiles UK panelists who are homeowners. The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.