Energy firms given three-week deadline to explain direct debit hikes

Energy suppliers face “substantial fines” for cases of non-compliance with Ofgem’s rules, Kwasi Kwarteng has confirmed

Energy suppliers have been granted a deadline of three weeks to justify an alleged practice of increasing customers’ direct debit payments.

The issue was raised again last week, with Business Secretary writing to the energy regulator to ask for a crackdown on energy firms amid claims some are hiking charges by more than is justified.

Yesterday, Kwasi Kwarteng said: “Some energy suppliers have been increasing direct debits beyond what is required.

“I can confirm Ofgem has today issued compliance reviews. Suppliers have three weeks to respond.

“The regulator will not hesitate to swiftly enforce compliance, including issuing substantial fines.”

Ofgem had previously raised concerns about increases in direct debit payments by energy companies.

It said some suppliers may have been increasing direct debit payments by “more than is necessary”, or directing customers to energy deals that “may not be in their best interest”.

The new price cap brought an increase of £693 on energy bills.

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