Consumers 'risk being tied to expensive utility tariffs'
Published On 15 May 2008
Nearly one million consumers in the UK are being prevented from switching to a cheaper utility deal because they have defaulted on a payment and owe money.Website MoneyExpert.com found that 726,000 people have missed a utility bill payment in the last six months.
It warned that these consumers could find themselves "trapped" on more expensive tariffs if they don't settle their bills.
Current rules mean that any money a customer has not paid to a supplier becomes a 'debt' after 31 days. At this point, they can prevent the person from switching to a more competitive utility supplier.
Sean Gardner, founder of MoneyExpert.com, explained: "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.
"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."
Recently, Chris Tapp, director of charity Credit Action, warned that rising utility and food prices could push more people in the country into debt.
