Thousands of households across the UK may have found themselves on pricier energy tariffs after using auto-switching services intended to cut costs, a report to energy regulator Ofgem has indicated.
Octopus Energy has highlighted concerns in the report, suggesting that as many as 20,000 energy consumers could have been affected this year alone.
These consumers, it is claimed, were transferred onto tariffs that were more expensive than if they had directly chosen their energy supplier.
The report suggests that many consumers were unaware they had been enrolled in these auto-switching services, which were once popular but have since declined in use, particularly after the surge in energy costs since 2021.
While some of these services charged fees, others appeared to make profits by placing customers on higher tariffs than they would have been on if they had chosen their supplier directly.
In March, Octopus Energy reported a significant increase in complaints from customers who discovered they had been switched to another supplier only after receiving notification of a direct debit.
Upon investigation, it was found that the deal offered through the auto-switching service was £90 more expensive than if the customer had directly chosen the supplier.
A spokesperson for Ofgem told Energy Live News: “We are grateful to Octopus for bringing this issue to our attention and are carefully considering their findings.
“We expect both suppliers and third-party switching services to act in their customers’ best interests, and to make sure they are communicating with them clearly before initiating a switch.
“We have also strengthened the rules that mean when consumers do decide to change their energy supplier it is a smooth process, and they are quickly compensated if it doesn’t go to plan.
“We will continue to work closely with industry and consumer groups and charities to make sure these rules are working to protect consumers in the coming weeks and months.”
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