'Big Six' energy firms set to refund Direct Debit overpayments
A number of 'Big Six' energy customers are set to have refunds paid to them over Direct Debit overpayments.
The energy firms have seemingly finally caved under concerted pressure from MPs after it was revealed they make upwards of £36m a year in interest payments.
Under the new deal, any customer who is in credit by more than a month's payment will receive an automatic refund. This comes in light of a number of newspapers revealing such accounts were being used to amass a staggering £36m a year in interest.
It is estimated more than 13 million households pay their energy bills by Direct Debit in the UK each month. Because they are often paid at a fixed rate, this then leads to a number of households overpaying in the summer months when the temperatures begin to rise and heating is used less and less. It is this overpayment the energy firms have been accused of profiteering on.
Discussing the prospect of potential refunds for a number of energy customers, energy minister, Greg Barker, said: "This looks like a real win for hard-pressed working people. I had a very frank meeting with the 'Big Six' last week, it was 'cards on the table' time.
"I'm very pleased to report that we appear to have made real progress for consumers. There's still detail to be agreed and I will not rest until we have scored a better deal for all energy consumers."
Although the deal has so far only been agreed in principle, it is understood the 'Big Six' are looking to create a best practice on the issue. This would also involve two checks a year on the accounts of customers who are paying more than they should on their energy bills.
A number of the 'Big Six' energy firms are also part of the government's Green Deal initiative. Under the scheme, energy customers can seek loans on energy efficiency improving measures such as a new boiler or loft or wall insulation and pay for the costs on a par with the amount of money they would save from fitting the energy saving measures.
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