Energy suppliers have hit more than two million households with large late bills in the last year.
That’s a result of consumers initially being undercharged, according to new estimates from Citizens Advice.
It found the average back-bill was for £206, with 15% of those who had been back-billed saying they were charged more than £250.
However it added people who contacted the charity have reported “much larger” back-bills.
Back-billing happens when customers have been undercharged for their energy for a period of time. It could be due to customers failing to pay bills but is often a result of supplier mistakes like underestimating bills or not investigating a technical fault, stated Citizens Advice.
Billing errors are said to be the main energy problem people contact the charity’s customer service about, with 16,000 such cases last year.
It claimed one person asked for help when the consumer was billed “out of the blue” for £1,120 as the supplier had only sent them estimated bills and had never read the meter over a five-year period.
“The charity also helped a blind man who set up a monthly direct debit because he could not take meter readings – three years later he received a back-bill demanding £3,500 after the supplier said the monthly payment had been an underestimate,” it added.
Citizens Advice believes smart meters, which will digitally send regular meter readings to energy suppliers and offered to every home by 2020, could reduce the impact of back-billing.
Gillian Guy, Chief Executive of Citizens Advice, said: “Customers shouldn’t have to pay the price for suppliers’ mistakes. Energy bills are already high so it adds insult to injury when companies go back to customers looking for more money after they got it wrong. Particularly for suppliers who insist on payment in full, this can be a huge burden on already stretched finances.
“Smart meters provide a perfect opportunity to consign back-billing to the history books. As they are rolled out across the country Ofgem should ensure suppliers reduce the length of time they can back-bill customers.”
ELN has contacted Energy UK for a comment.