Ofgem Forces Clarity On Direct Debits

(Reuters) – OFGEM WILL INTRODUCE new conditions on utilities to ensure direct debit payments are accurately set and explained to customers, the energy regulator said today.

Ofgem produced a study in March which found energy companies were inadequately explaining increased charges to its customers.

‘The proposed licence condition will help give customers peace of mind that the amount they are being asked to pay is based on their likely energy use,’ chief executive Alistair Buchanan said in a statement.

Ofgem said the new measures, expected to be in place by winter 2009, will also make companies explain why they were holding onto credit surpluses built up by customers.

In a separate move, Ofgem confirmed it will ban unjustified price difference for customers using pre-payment metres or off the gas grid from September 1st.

The practice was highlighted in Ofgem’s retail probe last year. Energy suppliers have already removed £300 million of unfair price premiums, the regulator said.

Ofgem was also in the final consultation stage of other measures stemming from the retail probe, that could include tougher rules on doorstep sales and a new annual report on energy use and cost for customers.

Britain’s biggest energy suppliers are British Gas owner Centrica, ScottishPower, RWE npower, EON UK, Scottish and Southern Energy and EDF Energy.