Four million homes in debt to energy giants

Ofgem to launch new mis-selling investigation into E.on as figures show sharp rise in fuel poverty
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The Independent Online

Fresh fears that millions are heading into fuel poverty are raised today as figures reveal that consumers now owe £478m to their energy suppliers.

The news comes after yesterday's announcement by Ofgem that it has launched a new investigation into mis-selling on the doorstep or the phone, this time against E.on.

The energy watchdog is already investigating the sales tactics of three of the Big Six firms – Scottish Power, SSE and npower. Its recent investigation into EDF Energy resulted in the French giant agreeing to pay out £4.5m after staff were found to have made misleading claims to customers.

Audrey Gallacher, director of energy at Consumer Focus, said: "Mis-selling has been a consistent problem in the energy market. Any suspicion that a supplier is in breach of their obligations to sell fairly must be tackled head on."

E.on is the only Big Six energy supplier which is still involved in doorstep sales, an activity which has led to many accusations of mis-selling. "E.on has persistently failed to take action on this unwanted sales activity, despite being the only major supplier left selling at people's homes," Ms Gallacher said.

In the past, pushy energy salespeople have been known to sell expensive tariffs to unwary people or trick them into signing switching agreements.

Expensive tariffs have left more and more people unable to afford to heat their home adequately, leaving them in fuel poverty. New figures published today reveal nearly four million households are in debt to their energy supplier, owing an average £131.

The figure has climbed 4 per cent in the past 12 months, and is 15 per cent higher than in 2008, according to uSwitch. Heating and electricity charges have soared 53 per cent since 2008, pushing the cost of the average yearly home energy bill up by £433. In the last year alone average bills have climbed £183 – 17 per cent – to £1,252.

Ann Robinson, director of consumer policy at uSwitch, said: "With households still struggling to absorb last year's price hikes, energy debt is on the rise again." She warned that the debt can lead to a spiral of being trapped on high tariffs. "Those in energy debt can face a catch-22," Ms Robinson warned. "Despite knowing they could reduce their bills by moving to a cheaper energy plan, consumers can see debt as a barrier to switching."

Research published by The Independent suggested the number of people who die because they can't afford to adequately heat their homes could be as high as 8,000 a year.

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