The big six energy suppliers have committed to paying back a total of £153 million to past consumers who haven’t reclaimed what they are owed.
Around 10% of previous customers left credit balances on their accounts when they changed suppliers, averaging £50 per account.
According to the plans, the new scheme will return the cash to the consumers and prevent the funds from building up in the future. Unclaimed funds will be used to help vulnerable customers.
Ofgem chief executive Dermot Nolan said the scheme is an important part of addressing the lack of trust that consumers have towards the energy industry, and warned that a similar situation should not be allowed to happen again.
“Suppliers must now do everything within their powers to return the money and prevent a similar situation from happening again. Failure to deliver on the initiatives announced today could trigger further action by Ofgem, including enforcement,” Nolan said.
Energy UK have urged users to make use of the MyEnergyCredit online tool that assists consumers to reclaim money owed to them.
Some customers will not be found by the suppliers and this money will be used to tackle fuel poverty.
The group’s chief executive Angela Knight said “From now on, after two years, any monies remaining from unclaimed credits will be put towards funds to help the fuel poor and vulnerable. This will amount to at least £65 million over five years. Suppliers will kick start this new deal with £38 million for 2014 and 2015 combined,” Knight said.
Executive director of consumer group Which? Richard Lloyd welcomd the move, saying it is “unacceptable” for energy companies to sit on millions of pounds owed to consumers, adding that Ofgem was right to step in to deal with the matter.
“To help restore consumer trust in the energy market, suppliers must return this money as soon as possible and be clear about what customers should do when they close their accounts. Any money that can’t be reunited with the customer should be put towards helping vulnerable people struggling with their bills,” Lloyd said.