Last week saw yet another small energy supplier, Economy Energy, cease trading.
So if you’re concerned about how this might affect you, our Q&A explains exactly what happens if your supplier goes bust.
What happens if my supplier goes bust?
Ofgem’s ‘safety net’ comes into play to protect your interests. Ofgem is the government-backed energy market regulator, and it is responsible for looking after the interests of consumers.
Will I be cut off?
No. The safety net ensures there is no interruption of supply, to either gas or electricity.
Will I have to find a new supplier?
No. Ofgem will appoint another company to take over the business of the one that has gone bust. It puts the case out to tender, and other companies compete to offer the best deal.
Once a new supplier has been appointed, that supplier will contact you.
So what do I need to do?
Take a meter reading as soon as you hear your supplier has gone bust. Don’t switch to a new supplier straight away - wait until the new supplier appointed by Ofgem contacts you so you can see the terms of the new tariff they’re offering.
You can then decide whether to shop around for a better deal.
As far as your direct debit is concerned (if you pay by this method), you should leave it as it stands. Don’t cancel it. Your new supplier will tell you what’s going to happen regarding future payments.
So my tariff will change too?
Yes, you’ll go onto a tariff run by the new supplier. This will be called a ‘deemed’ tariff, which simply means you haven’t chosen it – it’s been allocated to you.
Will it be more expensive than my old tariff?
The price of the deemed tariff will be subject to commercial negotiations between Ofgem and the companies bidding for your old supplier’s business.
Ofgem tries to secure the best possible deal, but the new supplier might charge a relatively high amount to cover the cost of taking on the new business.
When GB Energy collapsed in November 2016, the new supplier, Co-operative Energy, chose to honour the existing terms and conditions, which meant GB Energy customers continued to pay the same rate as previously, and stayed on the same type of tariff.
What should I do when I’m moved to a new supplier?
Ask your new supplier to put you on its lowest tariff, and then run a comparison to see if there’s a better deal available for you to switch to.
Whatever you do, you won’t be charged a penalty (known as an ‘exit fee’) if you decide to switch.
What if I’m a pre-payment customer?
You’re fully protected by the Ofgem safety net.
If you’ve got credit on your key, card or token, it will be honoured. If you need to buy more credit, contact your new supplier – they’ll tell you what you need to do, and send you any additional equipment you might need.
What if I’m in credit with the old supplier?
Your new supplier, working with Ofgem, will honour any credit you have. It will contact you to discuss the details. For instance, it might credit the money to your new account to create a balance.
What if I’m in debt with the old supplier?
The likelihood is that the debt will transfer across to the new supplier. They’ll keep you informed of what’s happening.
What if I’m already mid-switch when my old supplier goes bust?
The process will continue and you’ll be moved to the new supplier.
Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.