How safe is your Energy company credit balance?

Biggus_Dickus

If energy companies go bust their existing customers are ported to a new supplier (under Ofgem regulations) and outstanding credit etc is protected.

However, according to Martin Lewis on his TV show last night , quote “if you were to leave just before it went bust and you had credit owing then the credit wouldn’t be safe”.

Losing what could potentially be hundreds of ££’s seems a bit harsh,...does it not‽ :doh:

brewerdave

Biggus_Dickus wrote: »

If energy companies go bust their existing customers are ported to a new supplier (under Ofgem regulations) and outstanding credit etc is protected.

However, according to Martin Lewis on his TV show last night , quote “if you were to leave just before it went bust and you had credit owing then the credit wouldn’t be safe”.

Losing what could potentially be hundreds of ££’s seems a bit harsh,...does it not‽ :doh:

Don't think Mr Lewis is correct! I thought that ,but was assured that the SOLR was responsible for ALL credits -not only the ones owed to customers who were transferred over. Can't find the OFGEM statement at the moment but its referenced somewhere in the thread about the Iresa to Octopus situation.

Biggus_Dickus

brewerdave wrote: »

Don't think Mr Lewis is correct! I thought that ,but was assured that the SOLR was responsible for ALL credits -not only the ones owed to customers who were transferred over. Can't find the OFGEM statement at the moment but its referenced somewhere in the thread about the Iresa to Octopus situation.

...god forbid, no! :money::eek::D

System

Biggus_Dickus wrote: »

If energy companies go bust their existing customers are ported to a new supplier (under Ofgem regulations) and outstanding credit etc is protected.

However, according to Martin Lewis on his TV show last night , quote “if you were to leave just before it went bust and you had credit owing then the credit wouldn’t be safe”.

Losing what could potentially be hundreds of ££’s seems a bit harsh,...does it not‽ :doh:

He is and he isn’t correct. When GBEnergy went bust, my transfer had just gone through to A N Other and I got my credit balance back about 3 months later from the Coop. When the Coop put in its claim to Ofgem to recover the money owed from the Consumer Levy, there was some discussion about whether this was covered under SoLR Regulations. I understood that Ofgem had issued an industry consultation on this apparent anomaly in the Regulations.

Up until a couple of years ago, losing credit balances was a risk that we all took.

Biggus_Dickus

It was the very first question he answered on last nights show;

...not much cop this Martin geezer, is he?

System

Update: the Decision is here

https://www.ofgem.gov.uk/system/files/docs/2018/11/gas_slc_modification_official_notice.pdf

Quote: These changes will allow a potential supplier of last resort (SoLR) to recover costs associated with honouring credit balances for customers who have switched away from the failing supplier at the date the supplier fails. The changes will also ensure that any claim for credit balances represents the actual amounts owed to customers by the failed supplier and provide appropriate flexibility in the timings for the process of making a claim. Unquote

Anthorn

Hengus wrote: »

Update: the Decision is here

https://www.ofgem.gov.uk/system/files/docs/2018/11/gas_slc_modification_official_notice.pdf

Quote: These changes will allow a potential supplier of last resort (SoLR) to recover costs associated with honouring credit balances for customers who have switched away from the failing supplier at the date the supplier fails. The changes will also ensure that any claim for credit balances represents the actual amounts owed to customers by the failed supplier and provide appropriate flexibility in the timings for the process of making a claim. Unquote

I'm not good with jargon but as I read it, the protection of credit balances only applies to those who switch away from a failing supplier at the time the failing supplier fails but does not cover credit balances of those who switched away before the failed supplier fails. (confused yet?)

5 ... honouring credit balances for customers who have switched away from the failing supplier at the date the supplier fails ...

Same link as posted by Hengus above: https://www.ofgem.gov.uk/system/files/docs/2018/11/gas_slc_modification_official_notice.pdf

In any case as far as I know where a supplier goes bankrupt it's the Receiver and not OFGEM which decides who gets paid and who doesn't and again as far as I know money owing to customers are the last to be considered.

System

Anthorn wrote: »

In any case as far as I know where a supplier goes bankrupt it's the Receiver and not OFGEM which decides who gets paid and who doesn't and again as far as I know money owing to customers are the last to be considered.

That was the case prior to the introduction of the Consumer Levy in October 2016. Consumers with a credit balance were treated as unsecured creditors by the Receiver. The Consumer Levy now covers/protects the credit balances of all customers - current and ex (look at the definitions in your Link). The Consumer Levy is funded by an additional cost on all consumer bills. GBEnergy’s failure is reported as costing us all an extra £1 on our bills.

https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/extra-help-energy-services/ofgem-safety-net-if-your-energy-supplier-goes-out-business

AndyPK

He was thinking on his feet!

Good luck getting the money back!

P.S What deal/supplier was the questioner referring to, that earns interest on your credit??