Households owed £886 back by energy, water and broadband firms, Citizens Advice warns
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HOUSEHOLDS could be owed a combined £886 back from their energy, water and broadband and phone supplier after new research reveals people have been wrongly billed.
Citizens Advice says mistakes, errors in judgement and poor forecasts has led regulators to put the wrong values into their financial models.
This in turn has led to "unjustifiably"; high consumer bills.
And worse still, the charity reckons industry regulators' - Ofcom for telecoms, Ofgem for energy, and Ofwat for water - have made these mistakes going back up to 15 years.
Citizens Advice believes this has led to consumers collectively overpaying by £100million between 2014 and 2018 on broadband and home phone bills, by £11billion on energy from 2004 to 2019, and by £13billion on water bills from 2005 to 2019.
Or £886 if you divide those figures by the number of households in the UK.
The charity now wants companies to return the cash to customers through a rebate on their bills and for regulators to stop this happening again.
If they refuse to pay up, Citizens Advice says it will call on the Government to get involved.
Gillian Guy, chief executive of Citizens Advice, said: “Companies need to play their part in putting this multi-billion pound blunder right.
"They must compensate customers where they have been paying over the odds. If they don’t, Government needs to intervene.”
But it seems companies won't be forthcoming with refunds - Ofcom, Ofgem, and Ofwat say it'll be down to firms themselves to decide whether refunds are due.
A spokesperson for Ofcom said: “Our decisions have helped customers benefit from more choice and better services.
"That involves making complex forecasts on the cost of finance, which Citizens Advice has found to be largely accurate. We’ll continue to encourage investment in broadband, while protecting customers from high charges.”
How to cut your bills now
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Openreach, which owns around 80 per cent of the UK's broadband cables, declined to comment.
On energy, an Ofgem spokesperson said: “While we do not agree with Citizens Advice’s estimate of excess profits, we welcome its report and recommendations.
"We will continue to work closely with them and wider stakeholders to apply lessons learnt from previous price controls for the next price control period (RIIO2).”
When Citizens Advice first looked into this issue in the energy markets back in 2017, three companies - Scottish and Southern Electricity Networks, SGN, and Western Power - returned £287million to customers.
But energy networks trade body, the Energy Networks Association, says it doesn't agree with Citizens Advice's calculations so refunds won't be due this time.
David Smith, its chief executive said: “The calculations underpinning this research are simply wrong, with the numbers plucked out of thin air.
"The analysis conveniently ignores the pace of change that has been taking place in our country’s energy infrastructure to deliver record levels of renewable energy and prepare for things like electric vehicles, producing an inflated figure as a result.
“The full cost of these changes is not reflected in this research."
Meanwhile, Ofwat chief executive, Rachel Fletcher added: “We welcome the recommendations from Citizens Advice and the work it and other consumer bodies do to highlight important issues around the affordability of essential services.
“We have already made changes to the way we set the cost of capital through our price review, so customers will not lose out.
"Our early view on the cost of capital for 2020 onwards is the lowest so far, and together with other measures would reduce customers’ bills by £15 to £25 (before inflation).”
Tony Smith, chief executive of watchdog the Consumer Council for Water, said: “Citizens Advice’s report echoes many of the concerns we’ve repeatedly raised about regulatory over-generosity in the water industry, which has benefitted shareholders but not consumers.
"Since 2015 we estimate water companies have pocketed an additional £500million windfall and we want to see a share of that returned to customers in lower bills or investment in essential services.”
Water UK - the trade body for water companies - declined to comment.
More on bills
Citizens Advice has also had a go at companies over the amount loyal customers are overcharged by - a whopping £1,440 a year.
And MPs have demanded that banks and insurers publish these amounts.
Meanwhile, here are nine households bills that went up from April 1 – and how to avoid the hikes.
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