'Unfair energy bills must not be allowed', regulator says

24/03/2009

Customers who pay for their fuel through pre-payment meters are suffering from unfairly high bills, the industry watchdog has suggested.

A new action plan for changing the way in which these customers are billed was launched by Ofgem yesterday.

The customers, many of whom are on low incomes, typically pay around £90 per year more for their gas and electricity than those who pay through Direct Debit.

Meanwhile, fuel costs £80 more for those who pay via cash and cheque.

Ofgem chief executive Alistair Buchanan said: "This is an emphatic move by Ofgem to clear the decks of obstacles that prevent consumers from getting access to the best offers."

Kevin Still at EuroDebt added: "One of our priorities when dealing with someone in debt is to find and offer the cheapest payment methods for priority expenditure. This may take the form of basic bank accounts or pre-paid cards. We are able to offer the cheapest energy tariffs once arrears have been cleared with existing providers.

"This may also mean that a payment meter is not longer the default method of payment. Being able to enable people to pay over the Internet, by phone or by direct debit often mean that vital disposable income can be released that can be usefully directed to other priority payments or clearing debts."

Proposed changes to the billing are now to be the subject of an industry consultation - with definite decisions on the matter to be taken later this year.

Tags; Housing Debt and Bills, Credit Card Lifestyle,

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