What happens if a small energy provider goes bust?

lybir

Please can someone inform me if there are any rules laid down by Ofgem if an energy provider goes bust. Is the money a customer has in credit with such a company protected and is it refundable? Really concerned about Iresa's present situation. Personally I haven't encountered any problems using Iresa but I know a lot have and I'm worried they may have a cash flow problem in future as customers are leaving in droves.

D_M_E

If a small supplier goes bust then Ofgem will find another supplier to take over the bust supplier's customers.

The new supplier usually honours what is left of customers' supply contracts and usually also take over customers' credit, if any, and any remaining credit left on termination of contract should be returned.

This is what happened with the 2 recent failures, one this year and one last year.

If you have a lot of credit, ask your supplier either for a refund or a reduction in the DD to eat it up.

System

Just over a year ago, Ofgem introduced as part of its Supplier of Last Resort procedure what is known as the Consumer Levy. Who pays the Consumer Levy? The answer is that all energy consumers will see the cost of any supplier defaults added to their future bills. Personally, I feel that Ofgem's policy is unfair on the vast number of consumers who choose suppliers that are unlikely ever to go bust. The risk should sit firmly with the supplier via an Insurance Bond that they pay for. At the moment, any person with a laptop; some research about the energy supply sector and its regulations and £400 can get a Supply Licence. Ofgem has made it very clear that its approvals process does not give an opinion on whether the person/s setting up the business are 'fit and proper'.

So how much are we talking about? A Final Ofgem Decision is still awaited on the Coop's claim for taking over GBEnergy's customers. Ofgem is minded to pay them £14.04M.

https://www.ofgem.gov.uk/system/files/docs/2017/11/last_resort_supplier_payment_claim_from_co-operative_energy_002.pdf

quiet_advisor

Hengus wrote: »

Just over a year ago, Ofgem introduced as part of its Supplier of Last Resort procedure what is known as the Consumer Levy. Who pays the Consumer Levy? The answer is that all energy consumers will see the cost of any supplier defaults added to their future bills. Personally, I feel that Ofgem's policy is unfair on the vast number of consumers who choose suppliers that are unlikely ever to go bust. The risk should sit firmly with the supplier via an Insurance Bond that they pay for. At the moment, any person with a laptop; some research about the energy supply sector and its regulations and £400 can get a Supply Licence. Ofgem has made it very clear that its approvals process does not give an opinion on whether the person/s setting up the business are 'fit and proper'.

So how much are we talking about? A Final Ofgem Decision is still awaited on the Coop's claim for taking over GBEnergy's customers. Ofgem is minded to pay them £14.04M.

https://www.ofgem.gov.uk/system/files/docs/2017/11/last_resort_supplier_payment_claim_from_co-operative_energy_002.pdf

Totally support the information and views from Hengus above.

The other issue is the security of personal and banking data. The granting of a supply licence allows companies to harvest vast amounts of personal data. Some suppliers are unable to consistently produce timely and accurate bills (a core activity!) so I shudder to consider how secure they keep customer data. Call centres have significant staff turnover and probably little in the way of security checks.

QA