"Overcharging" claim by energy watchdog

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Government energy watchdog Ofgem says the UK's biggest energy suppliers could be "overcharging" millions of customers.

Huge prices rises have been announced across the board by five of the UK's Big Six energy firms - EDF Energy is yet to announce a hike.

However, Scottish Power, Scottish and Southern, British Gas, Npower and E.ON have all introduced price hikes recently - many of which are way over inflation, above the cost of wholesale energy, and come on the back of record profit announcements.

That has all added up to a finger of suspicion being pointed firmly in the direction of the energy companies - with Ofgem particularly concerned that the justification for the gas and electricity price rises seems flawed.

Ofgem has now called on the Big Six to explain how they set prices, and why the recent rises were necessary. It also wants confirmation that bill rises introduced mid-cycle will not effect energy costs prior to the hikes.

Customers have contracts with suppliers which should be honoured, regardless of variations in price, it said.

The crux with the price rise issue, according to ThisIsMoney, is that customers must provide a meter reading the day before the price rise, otherwise suppliers simply estimate energy use at the new higher and previously lower prices.

EDF Energy, which is still to announce rises, last week admitted that 100,000 customers had been overcharged over seven years, whilst a telephone meter reading service was not functioning properly. The majority of customers were overcharged by less than £5, according to the energy firm, which says it will refund customers by the end of September.

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