Homeowners in arrears cannot switch energy provider

16 May 2008 / by Rachael Stiles
As fuel prices rise, a growing number of homeowners will want to switch energy provider, but those who are behind with their bills will be trapped on their current tariff.

Homeowners who have defaulted on their fuel bills, and are therefore in debt to the energy provider, will not be able to find a cheaper tariff by switching to a more competitive supplier, MoneyExpert.com has said.

The comparison site has found that approximately 726,000 people have missed a payment for their gas or electricity in the last six months, and has warned that an equal number of people could be trapped on expensive tariffs if they are unable to settle their bills, as they will not be able to switch energy provider.

Centrica, which owns British Gas, has warned that in order to maintain profits it could increase prices by as much as 15 per cent, which could mean that households will have to pay £1,300 a year for their energy.

There are rules on switching providers, and these state that any energy bill which is unpaid for 31 days can be classified as 'debt'. The company can then prevent the customer from switching to another supplier until the debt is settled, but they also have the choice to allow customers to switch.

"Generally speaking, if you have defaulted on a recent energy bill and still owe your supplier money, you will be tied into that contract until you pay up," Sean Gardner, founder of MoneyExpert.com, said.

"With wholesale energy prices increasing, it's inevitable that gas and electricity prices will rise again, so we anticipate large numbers of people to look to switch to the most competitive deals once that process begins.

"However if you've missed a bill you won't have that luxury and could be hit with price hikes that you just can't avoid. The only way to release the shackles is to pay up and move on."

MoneyExpert.com urges householders who are struggling with bills to act now in order to switch to a more competitive deal and avoid damaging their credit rating by having unpaid bills.

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