Typically, when a provider goes bust, regulator Ofgem chooses a new supplier to take on the failed firm’s customers and the new provider is responsible for transferring customers across from the old firm, including moving across direct debits automatically. This is why the regulator says there is usually no need to cancel your direct debit.
However, we’ve heard from customers from a variety of firms who have had direct debit payments taken from both suppliers. The providers we spoke to told us that this would only happen if you set up a new direct debit yourself with the new supplier after it set you up with an account (as at least one firm’s online system was asking new customers to do), otherwise your old direct debit would, eventually, be automatically transferred across.
So if your provider has gone bust recently and you set up a new direct debit with the new supplier, check your bank statement now to make sure you’re not still paying your old supplier. If you are, Ofgem says you can cancel the direct debit with the old supplier, and that any credit (such as overpayments) you’ve built up is protected and will eventually be moved across to your new account.
To be clear, this issue is not a case of receiving your final bill from your old supplier and making an advance payment to your new supplier – this is about paying twice, as the old firm takes the regular payment and so does the new provider.
‘It is a nightmare and has left me short’