Jonathan Brearley COST UPS Jonathan Brearley

Ofgem to announce measures aimed at protecting money of energy customers

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theguardian.com

New measures to better protect customers’ money and stop energy suppliers using some of their cash “like an interest-free company credit card” are to be announced on Monday by the industry regulator.Ofgem said its package of “tough” measures was aimed at reducing the risk of more energy suppliers going bust, and would also include changes designed to stop firms raising customers’ direct debit payments by more than necessary.The shake-up is intended to ensure that suppliers “can weather the ongoing storm” and to prevent a repeat of last year’s failures “that put unfair and unnecessary costs and worry on to consumers”.More than 30 energy suppliers have gone bust since the start of last year as a sharp increase in wholesale energy costs triggered widespread losses.In April, Ofgem’s energy price cap rose by 54% – or almost £700 – to £1,971 a year, and last month the regulator indicated that it was set to rise again, by £800 or more, to about £2,800 in October.

That in turn is expected to help push inflation above 11% later this year.Ofgem said the measures were designed to improve the financial health of suppliers so that they could stand up to any future shocks, especially over the autumn and winter.

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