Plans to give the energy regulator Ofgem the powers to force energy companies to compensate customers for overcharging or mis-selling sound like a win-win for the public.
Until now the fines that Ofgem has imposed on companies – totalling £18m since 2007 – have gone to the Government, not to consumers. Companies have not been obliged to give back cash to consumers as a result of their errors, although many choose to do so.
All power to Ofgem, then? Well, up to a point. Of course it's a good thing if consumers get back money that should not have been taken from them in the first place. The flip side could be the growth of yet another industry revolving around no-win, no-fee ambulance-chasers pursuing consumers for potential cases of mis-selling – and pestering people at all hours of the day and night on the phone about it. It could be a question of be careful what power you wish for.Reuse content