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Economy Energy Goes Under

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Economy energy, a gas and electricity supplier with almost a quarter of a million customers has ceased trading, Ofgem confirmed on Tuesday.

Ofgem urged Economy Energy suppliers to sit tight and take meter readings whilst they appoint a new supplier.

The company’s demise followed a string of troubles; 100 employees were fired in October of 2018 and more were let go in the months following. Only a week ago the firm was barred from taking on new customers by Ofgem, for a minimum of three months.

Ofgem said at the time that they were “taking action to protect customers from suffering more harm” due to the “unacceptable level of customer service provided by Economy Energy”.

Just last month the firm announced that it had “no intention” of closing its doors. However, not long after that, it closed every one of its social media accounts with no explanation, with observers speculating that it was in danger after missing a deadline for its paying back renewable energy subsidies worth £13m.

Small energy suppliers that have exited the market now include Extra Energy alongside Spark Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U, Usio Energy and One Select.

Gillian Guy, chief executive of Citizens Advice said: “Ofgem’s moves to tighten up the licensing rules should address the problem of unprepared companies coming into the market. But the continued failure of suppliers shows there are firms operating that require the regulator’s urgent attention.”

Victoria Arrington from energyhelpline said that the models for the challenger small firms often leads to their collapse: “Small suppliers have offered cut price tariffs to attract customers. However they have often been subsidised by higher tariffs that the recent price cap has hit. Combine that with rising wholesale costs and you have a situation that is putting a lot of pressure on small suppliers.”

There are currently 1,303 complaints about Economy Energy open for investigation, according to Matthew Vickers, chief executive at the Energy Ombudsman.: “This follows a sharp increase in December, when we received 881 complaints about the company – more than double the number we received in November and one of the highest monthly complaint totals we have seen outside the Big Six.”