Energy firms are hoarding £3 BILLION in YOUR customer credit and making £159m in interest alone

Over two-thirds of Welsh billpayers (70%) are calling for energy suppliers to automatically return any customer credit in their account after winter following the success of a mass protest which saw 20,000 demand their cash back. It comes after a campaign group revealed energy companies are hoarding £3bn in customer credit.

Energy suppliers sitting on £3bn of customer credit

Over 20,000 customers joined the Big Energy Credit Claim Back launched in May, which urged supporters to reclaim unused customer credit. The protest was launched after a Warm This Winter investigation revealed UK energy suppliers are sitting on over £3 BILLION worth of customer credit, with nearly a third of UK households (32%) in the black to their energy supplier all year.

Further analysis found that the combined bank interest energy suppliers have made through customer credit balances was at least £159m in 2023.

Billpayers have claimed back an average of £330 from energy suppliers in the mass protest organised by the Warm This Winter coalition which is now calling on the next government and Ofgem to introduce an automatic credit return of people’s cash after each winter.

Hailed as a huge success for people power, Warm This Winter spokesperson Fiona Waters said:

People are fed up with energy suppliers keeping hold of their cash, making millions in interest on it and then customers often struggle to get their money back from reluctant suppliers. It’s common sense that after winter, if they have credit on their account it should automatically be returned to them and that’s why so many people joined the Big Energy Credit Claim Back.

The campaign proves that by a simple measure, bill payers can slash on average over £300 from their annual energy bills which is much needed and there is no real reason why an automatic cash back isn’t implemented.

Get your customer credit back

Customers who pay their energy bills by direct debit are incentivised with better deals to spread payments over 12 months, building up a pot of credit from July onwards to cover the winter months when they will be using more energy on heating.

In May, if their account is in credit, then experts including Martin Lewis have pinpointed this as the time to reset their balance and get back credit before they start saving again in July.

But under the current system, this is not automatic and instead, the onus is on consumers to claim back their credit which can be complex and in some cases, suppliers do not return the excess credit.

New research by Warm This Winter on how easy it is to claim back credit revealed nearly a third of Welsh billpayers (28%) found it difficult to get credit back.

Nearly a quarter (24%) felt their direct debit payments had been set too high and of those who got their credit back 13% were paid after a fortnight or more, 6% are still waiting for their money to be returned at the time of polling and 14% were refused their money even though they were in credit.

Simon Francis coordinator of the End Fuel Poverty Coalition commented:

Credit hoarding by energy suppliers must become a thing of the past.

Over a third of people in permanent credit to their energy firms live in households with low incomes and may have cut back on energy use or other essentials because the direct debits set by energy firms are far too high.

Let’s hope that once general election fever is over the regulator wakes up and introduces a new licence condition on suppliers that credit balances are refunded after each winter on an opt-out basis.

A ‘disgrace’

The Warm This Winter research conducted by Opinium this month which surveyed over 2,000 people across the UK also revealed a quarter of Welsh people (23%) who paid by direct debit found understanding how their direct debits were calculated was difficult and a similar number (22%) of UK adults felt it was also hard to understand how much energy they use.

Groups that also backed the Big Energy Credit Claim Back include 38 Degrees, National Pensioners Convention, and Fuel Poverty Action. They have also called for Ofgem and the next government to close this loophole.

Jonathan Bean from Fuel Poverty Action said:

It’s disgraceful that Ofgem has allowed energy firms to hoard our money during the cost of living crisis. Our money should be refunded automatically, with interest. Energy firms are deliberately overcharging and making it hard to get the refunds we are due. This exploitation must stop.

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