HARD-UP households have been warned they could be slapped with charges simply for wanting to change energy companies.
Suppliers can charge a security deposit to customers looking to switch over to them.
This usually happens if a customer has a poor credit score.
Suppliers typically run credit checks on customers looking to swap to make sure they are in a position to pay their bills.
If there are concerns that you may not be able to afford payments, suppliers can charge you for a security deposit.
It means if you don't pay your bills, companies can keep the cash to recoup lost costs.
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Households have been warned they could be asked to stump up hundreds of pounds in upfront costs just to switch suppliers.
One Sun reader was charged £470 by Ovo Energy to move over – and then struggled to afford proper food.
Moneycomms.co.uk personal finance expert Andrew Hagger said charging deposits "may be an area that the regulator needs to take another look at".
He added: "The energy market and cost of energy are both on a different planet compared with just 12 months ago, and as such, the deposit requirement is simply unaffordable for most people wishing to switch."
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While Hargreaves Lansdown senior personal finance analyst Sarah Coles said finding the cash to afford the fee could be "impossible" for many households feeling the squeeze.
She said: "It seems particularly harsh to do this to people who may have faced problems in the past and are trying to put things back together."
If you can't afford the upfront cost, suppliers may give you the option to join as a new customer on condition that you are on a prepayment meter.
But Sarah said this could drive customers' bills up.
That's because the current price cap for customers on prepayment meters is £59 higher than those on standard variable tariffs.
"You’ll be charged more for the energy you use this way, so anyone who has had problems paying bills in the past can be stuck between a rock and a hard place," she said.
Which energy suppliers charge a security deposit?
There’s no official cap on how much suppliers can charge – but it must be a “reasonable” amount, Ofgem told The Sun.
Whether or not you’ll be charged a fee to switch varies between suppliers.
The Sun contacted all energy suppliers to find out their policies on charging for security deposits.
Ovo Energy asks for a deposit if a customer has a poor credit score, and the amount it charges depends on their rating.
Customers on prepayment meters looking to switch over won’t be charged, however.
According to Ovo's website, any security deposit is usually refunded after you've left the energy supplier and have had your final bill.
In other words, you shouldn't expect it to be used towards bills.
Shell Energy said a “very small number of people” who apply to switch over don’t reach its credit score requirements.
In this case, customers can pay a security deposit dependent on their credit score.
The fee you'll pay will range from £150 to £300.
However, this money is returned to you within six months – as long as you keep up with your bills.
Utilita, So Energy, Octopus and British Gas said they don’t charge switching deposits.
Scottish Power did not answer our questions about whether or not it charges customers.
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