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The Independent UK
The Independent UK
National
Danielle Desouza

Failures of energy suppliers could see customers forking out an extra £164

The failures of energy suppliers could potentially add another £164 to customers’ bills, amid soaring energy prices and the cost-of-living crisis.

A report from charity Citizens Advice found that the bill for supplier failures, including the administration costs for Bulb, stands at £4.6 billion.

This could result in customers forking out an extra £164, the organisation said.

The charity has called on the Government to “urgently review” how different outcomes of the sale of Bulb may affect customers, to prevent bills from spiralling out of control.

Since the beginning of last August, 28 energy suppliers have failed, causing turmoil for more than four million customers.

When Bulb collapsed it had around 1.6 million customers on its books (Alamy/PA)

Bulb was placed into “special administration” when it collapsed in November last year and was propped up with an initial taxpayer loan of £1.7 billion to cover the normal running of the firm until a buyer could be found.

When Bulb collapsed, it had around 1.6 million customers on its books, meaning it was too big for the Government to allow it to go through the normal process that suppliers enter when they fail.

The taxpayer bailout was the biggest since Royal Bank of Scotland, Lloyds Banking Group and Halifax Bank of Scotland in the 2008 financial crisis.

The report comes days after the energy price cap – which is set by regulator Ofgem – was tipped to rise to £3,364 in January, £360 more than previously predicted.

It found that supplier failures have resulted in customers experiencing aggressive tactics from unregulated debt collection, receiving inaccurate bills as a result of poor data management pre-failure and footing an ever growing bill.

An overhaul is needed before winter piles more pressure on suppliers and customers. The Government must improve the supplier failure process and ensure people who’re struggling aren’t chased for debts or left in limbo when they’re waiting for a refund.
— Dame Clare Moriarty, Citizens Advice

Dame Clare Moriarty, chief executive of Citizens Advice, said: “More than half a year since the energy market went into freefall, the bill for supplier failures is still mounting.

“An overhaul is needed before winter piles more pressure on suppliers and customers. The Government must improve the supplier failure process and ensure people who’re struggling aren’t chased for debts or left in limbo when they’re waiting for a refund.”

Earlier this month, the charity found that customer service standards had plummeted since June last year, when many energy firms went under in quick succession and millions of customers found themselves shifted to new suppliers.

The average time to wait on the phone to speak to an energy supplier is now around six-and-a-half minutes, compared with just under four minutes last June.

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