Ofgem’s examination of the issue, a bugbear of many bill-payers, found that £1.4bn of customers’ money was languishing in the hands of companies in 2018 through overpayment.
The watchdog explained that suppliers are supposed to adjust fixed monthly payments, which are based on estimated energy consumption, over the course of a year.
It is to eliminate disparities caused by lower energy use during summer compared to winter.
But its report found customers were clearly overpaying and Ofgem feared the money was being used to fund “unsustainable business practices”.
The regulator said it was to consult on an ‘auto-refund’ policy, which would kick in on the anniversary of when a customer’s contract had started.