Millions of energy customers who pay by direct debit will now get automatic refunds from their supplier, regardless of how much their account is in credit by.
Customers will have overpayments returned to them each year on the anniversary of when they signed up to their tariff, and whenever they switch to a new deal, after five gas and electricity suppliers changed their policies on direct debit refunds (see our Energy Direct Debits guide).
Previously, some firms only automatically refunded customers when they were in credit by £100 or more.
On Friday, EDF was the first supplier to announce it was changing its policy. It's since been followed by British Gas, Scottish and Southern Energy (SSE), First Utility and Npower.
- British Gas now gives automatic refunds on any in-credit amount. Previously it only offered automatic refunds of sums of £100 or more.
- EDF now gives automatic refunds on any in-credit amount. Previously it'd have to owe you £75 or more before it gave an automatic refund.
- First Utility now gives automatic refunds on sums of £5 or more. Previously customers had to ask for a refund, or have it roll over to the following year.
- Npower will begin refunding customers automatically if they're in credit by £5 or more. This will begin later this year. Previously it only offered automatic refunds of sums of £60 or more.
- SSE now gives automatic refunds on in-credit cash of £5 or more. Previously it'd have to owe you £100 or more.
How do I get an automatic refund?
Refunds will be automatically given once a year on the anniversary of when you first signed up to your tariff. The only thing you might need to do is provide a meter reading, if the supplier needs one.
If you switch to a new deal, you'll be refunded automatically if you're in credit.
Your direct debit will be reviewed every six months, and you'll be asked to provide up-to-date meter readings, to ensure you don't build up a big credit or debit balance on your account.
What about Scottish Power and E.on?
Scottish Power will continue to automatically refund customers who are in credit by £75 or more, or who have been in credit by any sum for more than a month.
For other customers who are in credit, Scottish Power asks them if they either want a full refund, or would rather roll the cash forward to reduce their next bill.
Fellow big six firm E.on already refunds direct debit customers who are £5 in credit or more.
The changes follow talks between suppliers and Energy Minister Greg Barker.
Barker says: "This is welcome news for the 55% of energy customers who choose to pay by direct debit.
"This will ensure that customers are rightly returned the cash that is theirs without having to ask. I hope other energy companies will adopt this approach very soon."