A UK Cabinet minister has accused energy-supply companies of overcharging customers on direct debits to shore up their own finances as millions of households struggle with the cost-of-living crisis.
The Telegraph reports that Business Secretary Kwasi Kwarteng has announced a crackdown on suppliers following "troubling" reports that some are hiking bills "beyond what is required".
He revealed that the industry watchdog Ofgem has launched an investigation into the market and ordered companies to hand over their data.
If suppliers are found to have increased customer bills by more than is necessary, they could be hit with fines worth up to 10% of their turnover.
Ofgem has written to every energy supplier - including the likes of British Gas, EDF and Ovo Energy - asking for data on how much they charge customers. They have three weeks to provide the information.
The companies are allowed to increase their customers' direct debits based on estimated annual energy use and rising tariffs.
However, campaigners say some are exploiting the situation to boost their own finances in breach of rules, by demanding bigger-than-necessary payments so that customers end up hundreds of pounds in credit. This money can then be used to shore up suppliers' own balance sheets.
It is thought that people most likely to have been affected are those without smart meters, because their bills are based on manual readings or rough estimates. Around 14million households still rely on traditional meters.
Chancellor Rishi Sunak said last week it would be "silly" to do more to cut energy bills now, without knowing what will happen to wholesale prices later in the year. The price cap is due to be reset again before the winter crunch.
One of the biggest blows to household budgets has been the unprecedented surge in energy prices since last summer. Last month, the cap on energy bills rose 54% - from an average of £1,277 to £1,971 per year.
This has allowed suppliers to raise their rates for gas and electricity for the second time since October, prompting many to recommend that customers increase their direct-debit payments to build up enough credit for next winter - when the cap is expected to rise yet again.
A spokesman for trade association Energy UK said: "Suppliers are having to increase direct-debit payments to reflect bill increases and are required to set them at a fair and reasonable level based on the customer's individual circumstances - taking into account factors like previous energy use or record with previous payments.
"It's right that the regulator is looking to ensure that suppliers are complying with those requirements. Customers who do have concerns with the level of their direct debit payments should contact their supplier."
FTSE 100
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Companies reporting today
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- First-quarter results: Aston Martin Lagonda, Barrick Gold, Novo Nordisk
- First-quarter trading statements: Direct Line Insurance Group, Flutter Entertainment