Economy Energy stops trading
Economy Energy, a gas and electricity supplier with about 235,000 domestic customers, has ceased trading. If you're a customer, your energy supply will continue as normal – and here's what else you need to know.
Energy regulator Ofgem has said it will choose a new supplier to take on Economy Energy's customers as quickly as possible, but its advice is that if you're a customer, don't switch yet.
If you have an outstanding credit balance with Economy Energy, Ofgem says this will be protected, and you'll get your money back.
Last week, the supplier was banned from taking on new customers due to customer service issues, and just yesterday we reported that many former customers are furious over credit refund delays.
The collapse of Economy Energy follows a spate of failed suppliers in the past year – with a total of seven domestic providers going bust in 2018, including Iresa Energy, Spark Energy, Extra Energy and most recently, One Select.
I'm an Economy Energy customer – what should I do?
If you're an Economy Energy customer, Ofgem's advice is:
- Do not switch to another supplier at this stage.
- Take a meter reading, ready for when your new supplier contacts you.
Ofgem says this will make the process of transferring customers over to a new supplier, and paying back any outstanding credit balances, as smooth as possible.
More information will follow from your new supplier once one has been appointed in the coming days.
If you need further support, Economy Energy is advising customers to contact Ofgem – the regulator has a comprehensive set of FAQs here – or call Citizens Advice on 03454 040506.
I'm on prepay – can I still top up?
According to Ofgem, if you've a standard prepayment meter, you'll be able to top up as normal for now, then once it announces a new supplier, you'll get a new top-up device.
If you've a smart prepayment meter, Ofgem says you'll be able to top up "for a short while". However, your meter will soon be switched to 'credit mode' to allow your supply to continue without the need to top up. When the new supplier is appointed, it will discuss with you whether you want to go back to a prepayment tariff.
Will I keep my tariff – and will my bills go up?
Ofgem says your current contract – whether you're on a fixed or variable tariff – will end when you join the new supplier, and you'll be placed on what's known as a 'deemed' tariff. These are often more expensive.
However, in the past we've seen some suppliers deciding to honour existing tariffs when taking over from a supplier that's ceased trading, so it is possible this could happen.
Once the new supplier contacts you, check if the deal you are offered is the cheapest available to you.
Use our free Cheap Energy Club to do a full comparison and find your cheapest tariff. You won't be charged exit fees if you decide to switch.
I'm in credit with Economy Energy – how do I get it back?
Ofgem says that once a new supplier has been appointed, it will pay back any outstanding credit you may have. You will be contacted to be told how this will work.
Ofgem says you should take a meter reading and a note of your balance, and wait for the new supplier to get in touch.
If you're one of the many former Economy Energy customers that's been chasing the provider for a credit refund in recent months – as we reported this week – you should get this back from the new supplier.
If you've recently switched or you're currently in the process of switching away from Economy Energy, any remaining credit is protected under Ofgem's 'safety net' scheme.
I'm paying back debt to Economy Energy. Will I pay this to the new supplier instead?
This depends on whether the new supplier arranges to take on debts owed to Economy Energy. If not, you may still have to continue to pay it back to Economy Energy or an administrator, if one is appointed to run what remains of the company. Either way, you'll have to pay what you owe.
Once a new supplier is appointed by Ofgem, it will explain how things will work in practice.
Should I cancel my direct debit with Economy Energy?
The new supplier should be able to automatically move your direct debit over once it's appointed – though Ofgem says you're free to stop this and cancel your direct debit before the new supplier contacts you if you want to.
When the new supplier does contact you, it will explain how it'll take on your account, including direct debit arrangements.
I'm already in the process of switching from Economy Energy. Will this still go through?
If you have a switch in progress, you'll continue to be moved to the new supplier of your choice.
If you're in the process of switching to Economy Energy, Ofgem says it should go through as planned and you'll then be moved to the supplier that the regulator chooses to take over.
What does Ofgem say?
Ofgem's director for future retail markets Philippa Pickford said: "Our message to energy customers with Economy Energy is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected.
"Ofgem will now choose a new supplier for you, ensuring you get the best deal possible. Whilst we're doing this our advice is to 'sit tight' and don't switch. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.
"We have seen a number of supplier failures over the last year and our safety net procedures are working as they should to protect customers."
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