Future Energy goes bust leaving 10,000 customers in limbo. So what happens when an energy company collapses?
Future Energy customers are being urged NOT to rush to switch supplier following the company going bust amid fears other small energy companies may run into difficulties as energy prices rise.
But as soon as a new supplier is found to take over Future Energy's accounts, customers should certainly look at switching to ensure they’re on the best deal.
Whatever deal Future Energy customers were on, they’ll be able to switch without penalty, and it’s a good idea to start checking NOW to see what else is available.
The energy watchdog, Ofgem, is search for another supplier to take over the 10,000 Future Energy accounts and says customers’ supplies won’t be affected and if they are in credit, that will also be preserved.
The collapse of the small supplier, which has customers in the north-east and Yorkshire, follows warnings from the chief of Co-op Energy last year that volatile wholesale prices could lead to some smaller operators going under.
Future Energy went down without any warning and there was only a brief announcement on its site.
The company is the second small supplier to go bust this winter – Brighter World Energy closed in December, announcing that "We no longer believe that market conditions, or our underlying operation, make for a sustainable business model in the long term."
Its customers were taken over by supplier Robin Hood Energy.
What happens when an energy company goes bust?
The energy regulator Ofgem ensures that no one loses supply when a company goes down.
I’m a customer, what do I need to do?
Ofgem is advising customers to sit tight and wait to see who the new supplier will be. It says a new one is likely to be found in a few days.
What if I have questions?
Although Future Energy is no longer contactable, customers who want advice or help are advised to contact Ofgem on 0345 603 9439 (Monday to Friday, 9am to 5pm)
or call Citizens Advice on 03454 040506.
When will I know who the new supplier is and the date I'll be switched to them
Ofgem asks suppliers to bid to become the new supplier, so they can try and get the best possible deal for you in the circumstances.
After they’ve been chosen, you will be moved onto a new contract with the new supplier. This process should only take a few days.
Once you have been contacted by your new supplier, you should ask them to put you on their cheapest deal.
Then shop around for a cheaper supplier. You won’t be charged exit fees.
What if I have a smart meter?
Your energy supply won’t be disrupted.
If the new supplier can’t operate your smart meter in smart mode - it will continue to work, but as a ‘traditional’ meter.
That means the new supplier will operate it like a traditional meter, with meter readings taken manually.
Will I be on a new contract with a new supplier?
Yes. Your old tariff will end.
Instead, your new supplier will put you onto a special ‘deemed’ contract (this means a contract you haven’t chosen). This contract will last for as long as you want it to.
Don’t forget to shop around and see if a better deal is available.
Will my bills go up?
They may well do!
You’ll be put on something called a ‘deemed contract’ and these are often more expensive than what else is available.
That’s why it’s important to check the market as soon as you’re told who the new supplier is.
What if I’m in the middle of a switch?
You don’t need to worry. If it’s already in progress, you will continue to be moved to the new supplier you have chosen. You don’t need to do anything.
When your switch completes and the account with your old supplier is closed, you may be owed money if your account had built up credit with the old supplier. A new supplier will pay back money owed to you that's outstanding from a closed account.
What if I’m in credit now?
The new supplier will pay back any outstanding credit you may have.
Once they have been appointed, they will contact you to explain how this process will work. They may automatically credit money to your new account with them.
Ofgem’s advice is to take a meter reading and a note of the balance if you know it, and to wait to hear from the new supplier.
What if I’m in debt to my old supplier?
Whether you have to carry on paying back a debt depends on what your new supplier agrees with your old supplier’s administrators.
You will need to pay back the debt to your new supplier if they arrange to take on customer debts to your old supplier.
You will not need to pay back the debt to your new supplier if they don’t make this arrangement.
Once the new supplier is appointed, they will explain how things will work.
Should I cancel my direct debit?
You can cancel your direct debit before the new supplier contacts you, if you want to. You will be able to set up a new direct debit with the new supplier.
Rob Salter-Church of Ofgem assured Future Energy customers, “We will make sure your energy supplies are secure and your credit balance is protected.
“Ofgem is working to choose a new supplier as quickly as possible for you. Whilst we’re doing this, our advice is to ‘sit tight’ and don’t switch. You can continue to rely on your energy supply as normal – in fact the only thing that will change is that you’ll get a new supplier,” he added.
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