UK energy regulator Ofgem is calling on suppliers to do more to return the £406 million from closed accounts of former domestic and commercial customers.

Ofgem says it expects suppliers to make sure money is returned to the 3.8 million former customers affected.

The announcement follows an enquiry into the balances held by energy suppliers in relation to accounts that are now closed because the account holder has changed supplier or moved house, and the companies’ policies and practices that apply.

The regulator has outlined three key issues for UK energy companies to resolve.

Andrew Wright, interim chief executive of Ofgem, said: “We want to see decisive action by suppliers, individually and collectively, to address this issue and, wherever possible, to ensure that the 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, and suppliers need to be very clear with consumers about what they will be doing with this money.”

The third recommendation is improving transparency in future policies. Ofgem says energy companies need to adopt crystal-clear communication about procedures for closing an account and the size of balances held.

Debt the bigger issue
British Gas has responded to the Ofgem guidelines by saying that since 2012, the utility has sent more than 32,000 letters, made 18,000 outbound calls and received over 16,000 calls, returning money to 10,000 customers.

Ian Peters, managing director of residential energy at British Gas, said: “Even if customers are owed as little as a pound, we will always give them their money back, no matter how long ago they left us.”

Mr Peters however was keen to stress that the amounts involved were small compared to customer debt.

Peters said: “Any credit owed to customers is significantly outweighed by the value of customer debt.

“At September 2013, the amount owed to household customers was £40 million, with customer debt five times that amount, at almost £200 million.”

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