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Energy debts could be made worse by overcharging customers

Energy industry watchdog Ofgem has claimed that customers are being overcharged by as much as £100 a year for gas and electricity.

Experts say that gas prices could be cut by as much as 10% and electricity by 3.5% to make sure prices reflect wholesale costs more closely.

Over the past year, many energy customers have found themselves in debt on their energy accounts following big price rises in 2008, as their direct debit payments did not always rise accordingly.

A debt expert for Think Money said: “Energy bills are one of the biggest expenses households face on a month-to-month basis, so billpayers may want to know why prices haven`t already dropped in line with wholesale costs. This may be particularly difficult for billpayers who are struggling to repay their debts.

“Further price cuts could make a real difference to many people`s ability to repay their debts, although it might not be enough to help people with more serious debt problems – who should contact an expert debt adviser.”

Source:    http://www.thinkmoney.com