Energy Suppliers owe £1.8 billion to 13 million households says new Uswitch report

A new report released by comparison site Uswitch has shown that energy suppliers now owe £1.8 billion in credit balances to 13 million households in the UK with over a million customers owed £300.

Direct Debit payers owed

The report comes a few weeks after the energy regulator Ofgem announced that it was pushing for reforms to stop energy suppliers from using customer credit balances to fund what it calls ‘unsustainable business practices.’

An auto-refund policy was one of the ideas put forward and would see energy suppliers refund credit balances to direct debit paying customers annually on their contract start date.

Consumers who pay with direct debit often pay the same amount every month resulting in them building up debt in the winter months and credit over the warmer summer months.

"At a time when many people’s finances are stretched any windfall would be gratefully received. Many who have been affected financially by the pandemic may be looking for ways to save money, and it’s worth checking with your supplier to see if you are owed any money following your most recent bill being paid," said Sarah Broomfield, energy expert at Uswitch.

Also read: Ofgem lays out plans for energy suppliers to automatically refund surplus credit

A long term issue

Credit repayments have been an issue for the energy supply industry for years with energy suppliers continuing to fail to repay credit in a timely manner.

With 59% of energy bill payers saying that their many energy suppliers do not automatically issue refunds to customers in credit, the money owed often lies unclaimed and unreachable.

The report from Uswitch surveyed 2,009 UK energy bill payers in April and found that almost half are due a refund from their energy supplier. The average household is owed £142.33 which when upscaled to a national level means that suppliers now owe £1.8 billion.

The total owed to consumers has risen by an extra £1million compared to the same time last year, despite more energy being used during the Covid-19 pandemic.

The report also found that a quarter of consumers in the UK in credit are owed a rebate of more than £200, while some 535,000 households are due more than £500.

“Some credit on the account is useful to have, especially where your energy supplier does not issue a bill every month- it helps with managing the energy bills. But it is important to see how much credit is still outstanding once the bill is settled, as there may be a surplus,” said Uswitch.

Also read: Majority of Energy Suppliers failing to refund credit to customers within 10 days

How can Energy Suppliers improve?

Energy suppliers can improve when it comes to repaying credit to their customers by being more transparent and getting their houses in order.

Better communication is required with the Uswitch report showing that over a third of consumers in credit (35%) said their supplier has never been in contact with them to review their direct debit payments.

Clearer messaging on how a customer can claim what they’re owed is also key with the report showing that nearly half of those consumers surveyed saying that they have no clue how to reclaim their credit balance.

Better technology can also help get on top of the issue. Dyball Associates CRM software for example allows energy suppliers to easily keep control of their customers accounts and clearly see what accounts are in credit and which are due a repayment.

Need help with your data quality? Contact us for how Dyball Associates Managed Services for Energy Suppliers can assist.

Further Reading

Covid-19 has changed the relationship between Energy Suppliers and their customers forever

Five challenger energy suppliers required to participate in Ofgem’s ECO3 Energy Efficiency Scheme after hitting customer threshold

What are Smart meter and Time of Use tariffs?

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