Ofgem has banned gas and electricity suppliers from issuing customers with back bills for energy consumption more than 12 months ago.
The ban will come into effect in early May and applies in situations where the consumer has provided meter readings and acted in good faith.
Currently, most large suppliers are bound by a voluntary agreement that prevents them chasing a domestic customer for energy supplied more than a year ago.The new development allows the ban to be applied to small businesses too.
According to Ofgem the average back-bill is £1,160 ($1,600), however they can be higher, putting financial pressure on customers.
Ofgem has further stated however, that consumers who purposefully prevent suppliers from taking or receiving accurate meter readings will not benefit from this ban.
Most billing problems are caused by a supplier’s billing system or with incorrect meter registration at customer’s address.
In situations where bills are incorrect, suppliers estimate bills until they are able to gain actual meter data.
With the increased roll out of smart meters across the UK, suppliers will no longer require estimated bills as accurate data will be available to inform the billing process.
Rob Salter-Church, Ofgem’s interim senior partner for consumers and competition, said: “Getting billing right is an essential part of customer service, and it’s unfair that consumers should be left out of pocket when through no fault of their own they’re issued with a shock bill from their supplier.”
Victoria MacGregor, the director of energy at Citizens Advice, said: “Previously we’ve seen evidence of suppliers trying to game the rules by blaming customers for billing errors, cases where suppliers have ignored their commitments entirely.”
Lawrence Slade, the chief executive of Energy UK, said: “Energy companies take accurate billing very seriously and where there are problems, the majority are resolved within 24 hours.”
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