Sunday 3 August 2008

Energy giants are told to pay back billions

ENERGY companies are overcharging customers by as much as £1 billion a year in defiance of European Union rules, it was claimed last week.

Lawyers said the breach could lead to consumers taking their utility firms to court to reclaim hundreds of pounds, in an echo of last year’s revolt over bank charges.

The 10m customers who pay by cash or cheque every quarter are being charged £699m more than is justifiable, according to a report from a committee of MPs last week. Pre-payment meter customers, including those with second homes, are paying up to £400m more.

The excess is in breach of an EU directive which states that any difference between payment methods should reflect the cost to the supplier. This is only £20 even though suppliers charge up to £69 more, MPs say.

Graham Kerr of watchdog Energywatch said: “I expect consumers to demand lower payments or even ask for a refund in the same way as bank-charge customers.”

The MPs on the Business and Enterprise committee called for suppliers to be forced to lower tariffs through price controls if they fail to act in 12 months.

This follows British Gas’s decision to raise gas bills by an average of 35% and electricity tariffs by 9%, increasing the average bill by about £267 a year — the highest ever single increase. About 1.6m of the firm’s customers who pay by direct debit have seen a steeper increase of 42%. Customers in London, the Midlands and East Anglia have suffered a rise of almost 44%.

full article

No comments: