Big Six energy firms slammed for holding customers' cash
The Big Six energy companies have been told to hand back more than £400 million owed to customers from closed accounts.
In yet more bad news for the UK's biggest energy companies, regulator Ofgem said the amount of money left in business and domestic accounts is "unacceptably large" and that the firms were not doing enough to refund customers who had either switched to another provider or moved home.
It is currently investigating whether the firms' polices are complying with existing rules and said it expects the Big Six to do "all it can" to return the money.
It estimates the companies hold at least £202 million from domestic customers and £204 million from business accounts. The Big Six have been under fire in recent months after all of them increased their prices before Christmas, putting more strain on family finances.
Andrew Wright, interim chief executive of Ofgem, said: "When many people are struggling to make ends meet, it is vital that energy companies do the right thing and do all they can to return this money and restore consumer trust.
"We want to see decisive action by suppliers, individually and collectively, to address this issue and, wherever possible, to ensure the balances they currently hold are returned to consumers.
"Where this can't be done, any remaining sums should be used to benefit consumers more generally, and suppliers need to be very clear with consumers about what they will be doing with this money."
If the money cannot be returned to the account holder, Ofgem expects companies to use the money to "benefit consumers more widely", it added.
Richard Lloyd, Which? executive director, said: "If true, it's shocking that some of the biggest energy companies are sitting on millions of pounds worth of consumers' cash.
"Suppliers must return this money as soon as possible and be clear about what customers need to do when they close accounts.
"We look forward to seeing the final conclusions of Ofgem's investigation, and quickly."
The body which represents the Big Six, Energy UK, said efforts are made to refund customers but the process can be complicated by people not providing new contact details.
It said: "Energy companies try and make sure individual customers' money gets back to its rightful owners. However, more commonly energy companies are owed many times more money by people who leave unpaid debts behind them.
"Although companies are working to return money where there are credit balances, sometimes former domestic customers provide no new contact details so suppliers don't know how, or to whom, they can return the money. The most common reasons energy companies end up holding funds are when the bill payer has moved home or when a customer dies and suppliers have no record of the next of kin.
"Suppliers already agreed with Ministers last year that they would take all reasonable steps to trace customers who leave a credit balance behind. But we need your help to do more.
"Firms can't even begin to return lost money if they don't have up to date contact details and an accurate final meter reading. If you think you may be owed money, get in touch with your supplier past and present, to check if they have funds to return to you."