What if your energy supplier goes out of business?

Ofgem has published proposals to protect consumers’ money in case their supplier goes out of business. The regulator plans to appoint a replacement supplier to ensure customers continue to be […]

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By Jacqueline Echevarria

Ofgem has published proposals to protect consumers’ money in case their supplier goes out of business.

The regulator plans to appoint a replacement supplier to ensure customers continue to be supplied with energy as some of their accounts may be in credit.

As part of the process for selecting a replacement supplier, Ofgem said it will take into account who can best protect consumers’ credit balances.

It is also proposing to allow the costs of reimbursing the credit balances to be spread across all energy customers.

This would better protect customers’ money and have a small impact on bills, it added.

Rachel Fletcher, Senior Partner for Consumers and Competition at Ofgem said: “We are proposing a safety net to protect customers’ credit balances in the unlikely event of a supplier failure. There are big savings to be made from switching of around £200 to £300 and now over 40 suppliers to choose from. These protections are designed to give people peace of mind so they can have complete confidence to shop around for the best deal.”

Ofgem is seeking views on its approach to dealing with supplier insolvency and its consequences for consumers until 29th July 2016.