Regulators must work together to stop banks and utility firms exploiting customers, say MPs

Ofgem, Ofcom, Ofwat and the Financial Conduct Authority must do better job in overseeing spending of £140bn a year on services

A 'huge part of the problem' was that regulators had 'traditionally worked on the basis that competition will lead to the best outcomes for people' (PA)

The regulators of essential household services must work together to stop banks, energy suppliers and other utility companies exploiting their customers, MPs have said.

Vulnerable consumers, in particular, are facing problems that are not restricted to one sector, such as debt, impenetrable bills and a struggle to access the best deals, the Public Accounts Committee (PAC) said.

The PAC said Ofgem, Ofcom, Ofwat and the Financial Conduct Authority (FCA) had not made enough progress in working together to oversee a combined £140bn a year of spending on services, most of which goes to private companies.

A “huge part of the problem” was that regulators had “traditionally worked on the basis that competition will lead to the best outcomes for people”, the report said.

But it also said competition has been used by companies to exploit their customers.

Many consumers are struggling to afford essential services and are in debt to multiple providers, having endured a 37 per cent real-terms rise in electricity prices, for example. Meg Hillier, chair of the PAC, said: “Consumers – disproportionately vulnerable ones – can face serious problems in accessing essential services such as water, energy, communications and finance.

“Issues including debt problems, struggling to access the best deals and seemingly impenetrable bills can significantly impact people’s daily lives.

“The primary role of regulators is to protect consumers from such issues. The main regulators of these sectors, however, too often take inconsistent approaches. They need to be clearer about what they are trying to achieve for consumers and the common solutions they can bring.

“Regulators must work closer together with the best interest of consumers at their heart. They must ensure that competition leads to more choice, better services and prevent consumers from being exploited by suppliers.”

An Ofgem spokesman said: “We welcome the challenge set by the PAC for Ofgem, Ofcom, Ofwat and the FCA to build on the progress we have made in working more closely together and to address policy and legislative barriers to protecting consumers. Ofgem looks forward to updating the PAC on our progress.”