Grant Shapps warns energy companies over direct debit hikes

Business secretary Grant Shapps has written to energy companies asking them to make sure customers' direct debits do not over-estimate their charges, and reflect what they are actually using.

In a letter to the chief executives of UK energy firms, Shapps said he was "disturbed" by reports from some consumers that their direct debits were going up, despite them making "huge efforts" to reduce their usage.

The letter, dated Saturday 26 November, called for companies to find a way to make their systems "more responsive" to changes in consumer behaviour and to ensure direct debits do not over-estimate charging.

It comes amid the ongoing cost of living crisis and rising energy prices.

In his recent autumn statement, chancellor Jeremy Hunt extended help from the government for energy bills through its energy price guarantee, but upped it from £2,500 to £3,000 from April.

In recent weeks, reports have suggested that some customers had seen their direct debit payments increase despite them actively using less energy to save money.

Energy regulator Ofgem recently told 17 British energy suppliers they have to improve how they deal with vulnerable customers.

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In his letter to CEOs, Shapps said: "It is critical that consumers are able to manage their bills effectively and direct debit can be an efficient way for families to smooth their energy costs over the year.

"However, I was disturbed to read media reports that some consumers are saying their direct debits are going up when they are making huge efforts to reduce their usage to save money at a time when household incomes are squeezed.

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"It is in all our interests that when consumers take sensible steps to reduce their own bills, such as reducing their boiler flow temperature or making their homes more energy efficient, that they are able to see an impact in their bills.

"I am very keen that all suppliers find a way to make their systems more responsive to these positive changes in consumer behaviour and have asked Ofgem to report to me on how this can be achieved.

"With other costs increasing for households, it is critical that we do what we can to help. I am interested to understand how you intend to ensure that your Direct Debit system does not over-estimate charging."