Energy companies to offer direct debit refunds

Published on Tuesday, 18 February 2014 09:57
Written by Daniel Mason

Four of the big six energy companies will now automatically refund direct debits to customers who are in credit.

While EON were already doing this, negotiations chaired by energy and climate change minister Greg Barker have resulted in EDF, British Gas and SSE plus First Utility following suit and passing consumers money back to them.

DECC has been in discussions with energy companies to provide customers with an automatic refund if they have a credit balance over a minimum threshold (varying between 1p and £10) at annual review point. Alternatively, the money can be rolled over to take off the next bill if the customer prefers.

Greg Barker said: "This is important and welcome news for the 55% of energy customers who chose to pay by direct debit. The coalition is committed to helping hardworking people reduce the cost of energy bills and this will ensure that customers are rightly returned the cash that is theirs without having to ask.

"There is still more to do but this builds on the coalition reforms to the energy market, and to have five of the major energy companies agreeing to this new approach will go a long way towards rebuilding consumer trust. I hope other energy companies will adopt this approach very soon."

The automatic refund of direct debit provides customers with more control over their energy bills. At the mid-year point on an annual direct debit arrangement, the supplier will:

  • Ask the customer for an actual meter reading if necessary; and
  • Once they have received it, review the direct debit and change it to make it as accurate as possible for the remainder of the year to avoid a large build-up of credit or debit on their account.

Source: Decc

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