Around 160,000 customers are to face higher gas and electricity bills as GB Energy Supply has announced it is no longer trading.
The company blamed recent rises in energy prices but insisted all customer contracts “will be honoured” and their supply will not be affected.
Customers are not able to log on to GB Energy’s website to access their accounts.
Managing Director Luke Watson said: “Due to swift and significant increases in energy prices over recent months and as a small supplier, our inability to forward buy energy to allow us to access the best possible wholesale prices means that the position of the business has become untenable and as such we will now be entering a process overseen by Ofgem to move you to a new supplier.”
Ofgem said it has existing procedures in place to ensure customers can have confidence their energy supply will continue and their outstanding credit balances are protected.
The regulator will move customers to the so-called “deemed” contracts which it states are usually more expensive.
That’s because the supplier takes on more risk as customers are moved to a new supplier quickly without the usual background credit checks. So they also charge more to make up for this extra risk.
However, Ofgem suggests consumers to take a meter reading today and not switch immediately but wait until their new supplier contacts them and tells them what to do about any credit balances they might have.
They should then ask to be put on the cheapest deal or shop around for a cheaper supplier.
Rachel Fletcher Ofgem’s Senior Partner for Consumers and Competition said: “In any competitive market companies will fail, this is why we have procedures in place to ensure customers’ energy supplies are always secure.
“If you are a customer of GB Energy Supply there is no need to worry as we will ensure your energy supplies are safe. Ofgem is actively working with the industry to ensure your transition to a new supplier is as smooth as possible. While this process is underway our advice is not to do anything as you can continue to rely on your energy supply as normal.”