Energy firms told to return £400m to customers

Millions of people are owed refunds by their former energy company, according to the watchdog Ofgem. It said yesterday that the Big Six firms have kept more than £400m over the past six years from customers who have switched supplier or moved house.

Some 3.5 million former customers of British Gas, EDF Energy, E.On, NPower, Scottish Power and SSE are owed an average £58, the regulator said. Meanwhile, about 300,000 former small business customers are owed an average £680 each.

The watchdog has demanded that the large suppliers make sure money is returned to their former customers. Andrew Wright, Ofgem's chief, said: "When many people are struggling to make ends meet, it is vital that energy companies do the right thing and do all they can to return this money.

"We want to see decisive action to address this issue and, wherever possible, to ensure that balances they currently hold are returned to consumers. Where this can't be done, any remaining sums should be used to benefit consumers more generally."

Ofgem also said it was investigating whether suppliers' current policies and practices for returning money were "fully compliant with existing rules" and that suppliers could face fines if they have failed to meet standards of conduct.

Richard Lloyd, Which? executive director, said: "It's shocking that some of the biggest energy companies are sitting on millions of pounds worth of consumers' cash. They must return it as soon as possible and be clear about what customers need to do when they close accounts."

Ian Peters, of the UK's biggest energy supplier British Gas, said his firm always provides a full and immediate refund to customers for any sum owing to them "whenever we can contact them".

However, he said credit owed to customers is far outweighed by customer debt, which stood at almost £200m last September compared with the £40m British Gas owed to its customers.

What should you do if an old energy company still holds your money?

If you switched to another supplier or changed tenancy, get in touch with your former supplier. You'll need a copy of your previous bill with information of your account details and your former address. Proof of identify may also be required.