Minister pledges fresh look at automatic credit repayments

A newly appointed energy minister has pledged to take a fresh look at automatic credit repayments.

Amanda Solloway, recently appointed as a junior energy minister at the Department for Energy Security and Net Zero, said she would explore mandatory credit repayments following concerns raised by fellow MPs.

During a debate in the House of Commons’ Westminster Hall, a string of opposition MPs denounced the retention by suppliers of credit balances on the accounts of direct debit customers and called for an automatic credit repayment mechanism to be devised.

Drew Hendry, the Scottish National Party MP who sponsored the debate, said he had received feedback from constituents that some are turning appliances off even when they are in credit with their energy companies.

He highlighted as an “absolute scandal” the example of his constituent Frances Raw, a widow on a state pension, whose direct debit has been increased by Ovo to more than £236 a month even though she had a credit balance of £1,796.36.

“In certain parts of this industry, these companies are behaving like it is the Wild West. Almost anything goes; almost anything is okay for them to get away with regarding customer service, accuracy and the errors that they make,” Hendry said, adding that undercharging is also not uncommon.

He added: “The position that people find themselves in does not seem to be met with any sympathy across the industry—it is just a fact of life; they are collateral in the game of business.”

Guidance from Ofgem, which places the onus on customers with large credit balances to ask firms for their money back, is “weak and not good enough”, he said: “They should be entitled to get that money back as a matter of course.”

Hendry said energy companies should print credit balances in green at the top of bills and any overpaid amounts automatically returned.

He also called for it to be mandatory that direct debits should account for credits when they are being sent out and for a duty on suppliers to openly declare their total credit balances to the public.

In response, Solloway said: “We should look at whether there could be some automatic repayment. I believe that that has been looked into before, but I am certainly prepared to do so and to give an assurance on that.”

Alan Whitehead, shadow energy minister, said in the debate that the system of credit balance “is not just thoroughly rotten but systemically rotten”.

Ofgem rowed back on proposals to make companies ringfence credit balances last November.