Page last updated at 02:01 GMT, Saturday, 22 November 2008

MP criticises energy firm charges

Gas flame
The big six energy providers all raised prices twice this year

A senior MP has said he believes energy companies are boosting their cash flow by increasing customers' direct debit payments even when they are in credit.

Conservative Peter Luff, chairman of the business and enterprise select committee, is calling on the energy regulator Ofgem to launch an inquiry.

Energy suppliers have denied profiting by increasing direct debit payments.

The trade body, the Energy Retail Association, said companies were acting in customers' best interests.

Millions of people pay their gas and electricity bills by direct debit but two price rises this year alone mean many consumers are unclear how much they should be paying each month to ensure they clear the amount due on their bills.

There will be people in fuel poverty who are paying by direct debit who can't afford these huge increases
Peter Luff MP

Mr Luff, MP for Mid Worcestershire, believes firms have been raising direct debit payments even when customers' accounts are in credit and warns this practice may be widespread.

"There's a real temptation for the companies to boost their cash flow at a time of economic recession," he said.

"I think things are getting worse and there will be people in fuel poverty who are paying by direct debit who can't afford these huge increases.

"So I think Ofgem need to investigate urgently to see if they think this is correct - that the fuel companies are using this quite a lot. And we need to do something about it."

Ofgem said it has not received any evidence of the misuse of the direct debit scheme.



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