Ofgem’s regulation of small suppliers has come under scrutiny following the news last week that recent start-up Iresa demanded a one-off payment of hundreds of pounds or a sudden direct debit increase – and in some cases both – from its customers.
If applicable, the direct debit and one-off payment were both taken out of customer’s accounts at the end of January, with very little warning.
In the wake of the story emerging, the energy regulator has been criticised over weak regulation of small energy suppliers.
Doug Stewart, chief executive of Green Energy UK, a small supplier itself, said: “Ofgem needs to introduce some sensible stress testing of energy suppliers.”
It is notable that both GB Energy Supply and Future Energy both hiked their direct debits shortly before closure – there is concern this may be a warning sign that another small supplier is in trouble.
Iresa has a 1.6 out of 10 rating on the review site Trustpilot – and the same website lists a number of complaints from consumers about billing errors.
When contacted, an Ofgem spokesperson said: “We are discussing these issues with Iresa. Suppliers must take a customer’s ability to pay debt into account when setting up repayment plans. They must also make it easy for customers to contact them and have customer service arrangements and processes which are fit for purpose.”
Iresa could not be reached for comment at the time of going to press, but it told Which? that one-off payment requests reflected reviews of customers’ usage, and that it would respond to queries “as soon as possible”.