Protection measures for customers credit balance.

The boss of Octopus Energy has slammed proposals to ringfence energy customers’ credit balances.

On Monday, the regulator set out measures to protect customers balances and improve the resilience of energy retailers.

Since the start of the energy disaster in September last year, 29 energy suppliers have gone bankrupt as a result of massivly rising energy prices, insufficient hedging and bad management.

According to Octopus Energy, ringfencing customer balances is an “inadequate measure” to tackle the causes and costs of supplier failure.

The company’s analysis shows that it would do nothing to fix the main causes of failure whilst increasing the pressure on consumers by adding up to £30 to customer bills every year and would increase supplier profits.

Alternatively, Octopus has planned an insurance security policy for credit balances, corresponding to the kind provided to holidaymakers (ATOL) and FSCS used to secure bank deposits.

“It’d be bonkers to raise customer prices and increase supplier profits when much cheaper alternatives would be at least as effective in protecting customers’ money, Greg Jackson, Chief Executive Officer and Founder of Octopus Energy Group, stated.

“The regulator should resist pressure from companies to adopt ill-considered ideas which would make the crisis worse for customers and more profitable for suppliers.”

“Crude ringfencing is financially illiterate, which is why it’s not used in other industries. Its proponents need to be honest that it would cost customers a lot more than it saves, and would actually drive up supplier profits.

Protection measures for customers credit balance.

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