The buzzword is that several members of Parliament has accused energy companies for “ripping off” consumers who fail to pay their bills through direct debit. They said that poor customers are burdened with high energy bills, which leads to this situation. Government figures reveal that people who in cheque or cash, typically end up paying 114 pounds a year more than who make automatic payment. As many as 200 MPs have envisaged motion at the House of Commons calling for an immediate enquiry by the regulatory body, Ofgem.
On the other hand, energy firms vehemently opposed the accusation by responding back. They said that their charges for those who do not pat reflect higher cost of processing or maneuvering the payments. However, Robert Halfon, a backbench MP from the Conservative fold said they amounted to some sort of a tax or monetary imposition on the poorest sections of society. Energy companies have ceaselessly and spinelessly exploiting these hapless consumers, he said. They “have been fleecing a poor consumer”. The pensioners and the poor in particular, have to bear the brunt of these measures. Mr. Halfon, in his interview to BBC Radio’s Five Live, termed this as “stealth tax”, which evaporates after some time. Quick buck, easy and undue money can be the precise derivative in this context.
His campaign has moved the Prime minister already, who asked officials to investigate whether people paying by cash were subsidizing those who do via direct debit. The concerned regulator said it was evaluating payment costs as part of its prevailing competition assessment. In particular, it reported to be investigating a supplier named Scottish power, who had allegedly flouted rules. Ofgem deems suppliers to charge the same amount for every payment mode, until it is justified on monetary grounds. Considering the public concern over these discrepancies, the body has urged suppliers to ascertain how they guarantee more assurance to consumers regarding their fair treatment in the market. 17 out 32 firms charge more for cash methods and 45% of the lot takes the more expensive route to pay bills, it added.
Mr.Halfon said many people cannot use direct debit since they do not have any bank account. He also said that energy firms channelized the extra cash to locate people who could not pay. Energy UK, which is the poster boy of most energy suppliers in the country, said it was aware of regulatory concerns and would meet them to discuss all issues after the forthcoming debate on Tuesday afternoon.