Energy companies creaming interest of customers credit balances

Fred2712

Don’t forget all those thousands of customers who are running a deficit on their Budget DD & getting free credit.
If you don’t like building up a credit pay whole amount DD instead.

Gerry1

Cardew said:

A quick fix would be for Ofgem not to allow newly formed companies to have Direct Debit tariffs for, say, one year. Having customers pay quarterly bills in arrears would ensure the backers had deep enough pockets for such a business model.

Even better for Ofgem to insist that all Direct Debits were Variable DDs (or at least that Fixed DDs were available only on request).  That would also help to end the widespread confusion that a fixed tariff results in a DD that can't be increased no matter how much energy is used.

sdmitch

@Streaky_Bacon

You do not understand what Share Capital is. It is not the money that is put into the company by the shareholders.

It is the money that is raised by selling stock.

It is perfectly common practice for a limited company to issue £100 of stock to its shareholders.

This is so Bob and Carol can start a company and each get £50 of stock, in other words, 50% ownership of the business each.

£100 is common because it is easy to work out the percentages.

This is just how the company ownership is accounted for. It has absolutely nothing to do with how much money Bob and Carol, or anybody else actually puts into the common.

Please don't make comments and make assumptions as to what I do and do not understand. I've been a Chartered Accountant for over 40 years and know fully what share capital is, just as I fully understand what a limited liability company is and why it is called 'limited liability'

The analogy I used in describing AVRO and the likes remains true - none of the shareholders of any of these failed energy supply companies have lost a single penny - they put nothing in in the first place - they took risks with money borrowed from their customers - while often siphoning off funds to their other interests.

Spend some time examining their corporate data on Companies House and follow the trail - it stinks - changing company year ends to avoid filing statutory data - a common avoidance technique and a red flag if ever there was one. 

Streaky_Bacon

sdmitch said:

Please don't make comments and make assumptions as to what I do and do not understand. I've been a Chartered Accountant for over 40 years and know fully what share capital is, just as I fully understand what a limited liability company is and why it is called 'limited liability'

I assume that you have replied, by mistake, from a sockpuppet account, because you are not the account I replied to and your account has not been used to post elsewhere in the threads.

Assuming that you are the ihatetrump account also, then this is not a comment that would be made by a Chartered Accountant

"Almost without exception, these suppliers were established only in the last few years as small limited companies, with a very limited (some would say minute) share capital - usually £100 or less - yes, even the largest failure to date - AVRO Energy."

A Chartered Accountant would know that share capital is no reflection of the money invested by an individual, and would also not consider £100 to be "minute". They would instead know that it was a pretty standard amount used for the purposes of share capital.