UK energy firms to refund £153m from closed accounts

Britain's biggest energy firms have agreed to refund more than £153m to 3.5 million domestic customers after the cash accumulated in closed accounts over the past six years, the industry body announced today.

The energy regulator Ofgem this year ordered the big six gas and electricity suppliers to hand the money back after consumer groups complained it was "shocking" that they had kept such large sums.

British Gas owner Centrica, SSE, ScottishPower, E.On, EDF and npower had a total of more than £400m left in an estimated 3.5 million domestic and 300,000 business accounts after people and firms had moved or switched suppliers.

The average domestic balance is about £50 and the industry has also committed to hand back the cash from business accounts.

Dermot Nolan, chief executive of Ofgem, said the announcement by Energy UK was "an encouraging first step by the six largest energy companies to address Ofgem's call to reunite customers with their cash. It is good news for consumers and if you think you could be owed money we recommend that you contact your previous supplier."

He said the commitment was part of a wider challenge of delivering good customer service "that the industry must crack if they are to rebuild customer trust and confidence".

He added: "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."

In February Ofgem said that where balances cannot be returned to individuals they should be used in a way that would benefit consumers more widely. Suppliers were also told they must prevent similar buildups of funds in the future.

Minimum voluntary standards are being introduced to make the way credit balances are handled smoother, claims faster and to minimise how much money is left behind. However, from 2016, if cash is unclaimed after two years it will be used to help vulnerable customers struggling to pay bills. Suppliers are starting this process by donating £38m for the first two years.

Amber Rudd MP, minister for energy and climate change said: "This government is committed to helping hard-pressed consumers with the cost of energy bills. People should rightly be returned money that is theirs and was left behind when they moved house or switched."

Angela Knight, chief executive of Energy UK, said: "We are urging former customers to come forward and make a claim. Customers who think they haven't left a forwarding address or a final meter reading when they moved or switched should contact their old supplier. The website www.myenergycredit.com will help you do this."