Energy firms accused of hoarding almost £2bn of customers' cash as Brits face eye-watering bills
Companies are not banned from using their customer’s money, but a report into Ofgem’s performance as a regulator by Oxera, an analysis firm, found some of the energy businesses that collapsed this year were dependant on that money.
Avro and Utility Point were reported to be among the firms where cash paid in advance by customers represented more than 80% of the firms’ total assets.Ofgem has said companies must announce if customer credit balances make up more than half of their assets. Christine Farnish, who left Ofgem’s board after an argument over the energy price cap, said: “Energy firms are allowed to put their metaphorical hand into a customer’s pocket and use advance customer payments to fund their own businesses.
“It’s my guess that hard-pressed families have no idea that part of their energy direct debits are used to provide cheap financing for their supplier, rather than actually paying for energy consumed.”
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