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Ofgem to introduce new guidelines on direct debits

The energy regulator Ofgem is to introduce new regulations regarding energy bill direct debits by the end of 2009. With around 40% of the U.K.'s 26 million households paying their energy bills on a monthly basis via the direct debit system, there have been growing concerns regarding overpayments and the number of complaints has increased dramatically.

The problem is that as the energy companies increase the cost of gas and electric they have then increased the monthly direct debits taken from customer accounts above and beyond the actual increase in unit prices. As a consequence, millions of UK households have been in credit with regards their energy bills therefore allowing the energy companies access to free finance and interest on the overpayments.

At a time when UK taxpayers are struggling to cover monthly bills the hundreds of pounds, which have routinely been overpaid, could have been used to cover other living expenses and taken some of the pressure of UK consumers. The system has been in place for many years but of late there appears to have been a significant increase in overpayments which can take some time to be reimbursed by the energy companies. While it is impossible to completely aligned direct debit with energy payments on a month by month basis there is too much of a gap at the moment.

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