Thousands of energy customers paying through the nose after firm's collapse
Thousands of energy customers could see their bills surge by almost £400 after their supplier went bust and they were automatically placed on a more expensive tariff.
Brilliant Energy went pop and its 17,000 customers were moved to another firm, SSE.
The only problem is, that SSE charge a much higher rate, so Brilliant Energy's customer base are now massively out of pocket.
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Brilliant Energy is the third small supplier to go collapse in three months but Ofgem has a procedure in place that means customers don't have their gas and electric switched off.
Under the 'supplier of last resort' mechanism, also referred to as its 'safety net', an energy customer whose supplier goes bust will be automatically moved to a new supplier.
Around 80,000 customers have been moved around since the start of the year, as 11 companies have folded.
But many Brilliant Energy customers were on cheap fixed tariffs, and were shocked to find they'd been moved onto what could turn out to be one of the most expensive tariffs on the market.
On average, the switch will cost Brilliant Energy customers £281-a-year, rising to £397-a-year when SSE increases its tariffs by 10% in a week's time.
It makes it quite surprising then, that Ofgem's director for future retail markets, Philippa Pickford, expressed joy at the switch.
She said: "I am pleased we have appointed SSE, which will offer Brilliant Energy's customers a competitive tariff for their energy."
And Sally Jaques, head of We-flip, which is a switching service, said: "The regulator is always swift to step in and ensure that there is minimal disruption for customers left in limbo.
"However, the language used suggests that these customers can expect a cost-competitive deal, and it's clear that this isn't always the case."
An Ofgem Spokesperson said: "If a supplier fails, we find the best possible deals for customers.
"Around half of the customers from failed suppliers in the last 18 months have been transferred by their new supplier on to tariffs cheaper than their standard variable rate.
"In two instances, the new supplier's new tariff was the same price as the failed supplier's.
"SSE, like other new suppliers, has to send welcome packs to customers with details of the new tariff they are being put on.
"No customers are charged exit fees if they decide to switch to another supplier."
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