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Ofgem has denied accusations it is banning a tariff that offers interest payments on energy balances, in a statement issued on Friday.
The regulator came in for criticism earlier this week after telling Ovo its credit bonus payments fell foul of regulations.
The independent supplier’s offer of 3 per cent interest on direct debit balances conflicted with Ofgem measures to simplify tariffs. Some 83 per cent of Ovo’s customers received the bonus last year.
Jason Sharpe, customer service director at Ovo, said the way regulation is designed “isn’t always in the best interests of customers”.
However, Ofgem insisted it was “not banning” Ovo’s offer but working to make sure it “stays within our framework to protect customers”.
It added: “The last thing we want to do is stop deals which truly benefit consumers.”
Under the regulator’s Retail Market Review, suppliers are limited to four tariffs for each payment method. The aim is to make it simpler for consumers to compare deals and switch.
Ofgem said the rules were “flexible” and allowed deals like Ovo’s “where they are in the public interest”. Accordingly, Ovo has been asked to apply for a derogation in order to continue offering the deal.
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