Economy Energy has become the latest small energy firm to go bust, leaving hundreds of thousands of customers in limbo.
Outstanding credit balances of domestic customers will be protected and Ofgem will choose a new supplier to take on Economy Energy's customer base “as quickly as possible”.
Philippa Pickford, Ofgem's director for future retail markets, said: “Our message to energy customers with Economy Energy is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected.
“Ofgem will now choose a new supplier for you, ensure you get the best deal possible. Whilst we're doing this our advice is to 'sit tight' and don't switch. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.
“We have seen a number of supplier failures over the last year and our safety net procedures are working as they should to protect customers.”
Only last week, Economy Energy faced the prospect of having its licence revoked after it was banned by Ofgem from taking on new customers amid concerns over its customer service.
The firm was urged to “take steps to improve and expand” its customer contact procedures via email and webchat, address its billing and payment failures and issue customer refunds in a timely manner.
Ofgem took action due to the decline in the standards of Economy Energy's customer service, complaints handling processes and billing and payment procedures.
The regulator also ordered it to stop requesting one-off payments and increasing direct debits.
The Coventry-based supplier joins a long list of small providers that have gone bust recently, including Spark Energy, Extra Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U, One Select and Usio Energy.
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