Energy firms ‘double down’ direct debit payments against rules, MPs warned
MoneySavingExpert founder Martin Lewis said it was “worrying” that struggling businesses are using the practice to improve their cash flow.
Even customers with accounts in credit were in some cases seeing their direct debit payments double, he told the Business, Energy and Industrial Strategy Committee on Tuesday.
“There’s no reason to double someone’s direct debit when they’re in credit and the price cap goes up 54%,” he said.
“It’s not mathematically valid and it’s a violation of the license terms.
“I’ve been very concerned that a number of companies are doing this to improve their cash position at the expense of their customers, and I’d like to see the regulator clamp down on that quite substantially.”
The price cap, which is the maximum amount a utility company can charge a customer per unit of energy, will increase by almost £700 next month.
The 54% rise will drive up bills amid a cost of living crisis.
Gillian Cooper, head of energy policy at Citizens Advice, told the committee that the government’s current energy bill support measures are “insufficient for the scale of the crisis we face”.
She called for benefits that reflect the rate of inflation, more targeted support for the lowest income households, increased eligibility for the Warm Home subsidy, expanded energy rebate and delay repayment.
“We have to recognize that there are millions of households that are simply unable to meet the energy bill increases that we are going to see this year,” she said.
She added: “Without additional support, we are heading towards a crisis where a significant proportion of the population cannot afford to stay safe and warm at home.
“It will drive up the cost of other public services because when you live in a cold house you are more likely to suffer from health problems and it will increase demands for NHS services.
“Children living in cold homes cannot thrive and they will find it difficult to concentrate in school. So we need the government to provide more support to help deal with this crisis. »