Green Network Energy and Simplicity Energy stop trading – what you need to know

Regulator Ofgem will now start the process of choosing new suppliers to take on both firms' customers. Once Ofgem appoints a new supplier, you'll be contacted about transferring your account over and told what happens next.

DON'T switch now – sit tight and wait to be contacted by the new supplier

If you're a Green Network Energy or Simplicity Energy customer:

• Don't switch to another supplier until a new one has been appointed. You should wait until you've been contacted by the new supplier in the coming weeks.

• Do take a meter reading. It'll be useful to have it ready for when your new supplier contacts you. You should do this whether you're a credit meter or prepayment customer.

• When a new supplier's appointed, you'll likely be moved to a new deal – which may cost more. Ofgem says it's likely your current deal will end and you'll be moved to a special 'deemed' contract (a tariff you won't have chosen). These tend to be pricey, so it's possible your bills will go up.

• Once you've been moved across, check if you can save by switching. You can ask the new supplier to put you on a cheaper tariff, but you can also move away to another provider without being charged any exit fees, so it's best to do a whole-of-market comparison – which you can do on Cheap Energy Club – to ensure you find the best deal for you.

Why can't I switch away from Green Network Energy or Simplicity Energy straightaway?

MoneySavingExpert.com founder Martin Lewis spoke to Ofgem on Thursday to ask exactly why people are unable to switch until the new firm gets in contact. He explained it on his Twitter account:

Energy credit is protected – so you won't lose any money you're owed

You may be owed money by Green Network Energy or Simplicity Energy if your account has built up credit. 

Ofgem says the suppliers it appoints will pay you back any money you're owed. This applies even if you recently left one of the firms, but haven't yet had the cash back.

Likewise, if you owe money to either firm you will likely still have to pay it, though it's unclear currently whether this will be to your new firm or to administrators if and when they are appointed. The process for this should become clearer once new suppliers are appointed by Ofgem.

There's no need to cancel your direct debit

Ofgem says your new supplier will soon contact you to explain how it will take on your account, including any direct debit arrangements, so there's no immediate need to cancel your direct debit. The regulator will also tell you at that point exactly what will happen to any credit balance you may have.

It says you can cancel your direct debit before the new supplier contacts you if you want to though. If you've already cancelled it, there's no need to reinstate it, and your new supplier will explain what to do once it gets in touch with you.

If you've started a switch to or from the firms, it should still go through

If you've already started to switch away from Green Network Energy or Simplicity Energy, you will continue to be moved to the new supplier you have chosen. You should not need to do anything. Your current direct debit should be cancelled automatically, but make sure to check, and if not, cancel it manually after your switch completes.

If you're in the process of switching to Green Network Energy or Simplicity Energy, the switch should also complete as planned, although you will end up being switched to the supplier that Ofgem appoints to take over.

What do the firms say?

Both companies posted very similar statements on their websites, which said they were "ceasing to trade" and that "customers need not worry, their supplies are secure and domestic credit balances are protected".

Neither the firms nor Ofgem have given an explanation for why they have stopped trading – we've asked Ofgem for more info and will update this story when we hear back.

Philippa Pickford, director of retail at Ofgem, said: "Green Network Energy and Simplicity Energy customers do not need to worry, as under our safety net we'll make sure your energy supplies are secure and domestic customers' credit balances are protected.

"Ofgem will now choose a new supplier for you, and whilst we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime. 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."