Energy firms to hand back customers’ cash

The so-called “Big Six” – British Gas, EDF Energy, E.ON UK, npower, Scottish Power and SSE –have faced growing pressure from both consumers and Ministers to refund money to customers if accounts are in credit amid accusations the firms are profiting from huge interest payments on the surplus cash.

Research conducted in 2012 by consumer watchdog Which? revealed the energy providers were enjoying a £1.2bn surplus each year from customers in credit, although industry experts have claimed the figure could be as high as £2bn.

Energy Minister Greg Barker confirmed the changes could be introduced this winter after he chaired a meeting with representatives from energy providers, which has led to plans for a legal framework to make the repayments. He said it was a “real win for hard-pressed working people”, and claimed the decision had been brought about by pressure from consumers across the country.

Mr Barker added: “With more and more people switching to paying by direct debit to get the best deal it is vital they don’t unwittingly lose out. Some firms offer a good deal but it is by no means uniform across the sector.

“I am very pleased to report that we appear to have made real progress following my talks last week with the Big Six. There is still detail to be agreed but I am determined to get a better deal for energy consumers paying by direct debit and it is now within our grasp.

“This coalition Government is not only on the side of the consumer, we actually get things done.”

The energy industry has been told to agree a uniform plan on direct debits. Energy UK, the industry trade association, has agreed to develop with its member organisations proposals for best practice.