REGULATORS have warned “robust enforcement action” will be taken if energy companies treat customers unfairly when increasing direct debit payments.

Ofgem chiefs told the Scottish Parliament’s Energy, Net Zero and Transport Committee yesterday that a “very invasive” review is under way into the way power companies use direct debits.

It follows concerns raised by Martin Lewis’s MoneySavingExpert website, which said at least 30 per cent of customers with British Gas, Octopus Energy and Shell Energy had their direct debits increased by 100%, despite the increase in the energy price cap being half that.

Mr Lewis said the scale of the direct debit increases “smells wrong” – even when accounting for the recent increase of the price cap.

Scottish Labour MSP Monica Lennon asked Neil Lawrence, Ofgem’s director of retail about the issue, following reports some consumers had seen their bills double despite energy prices going up by 54%.

The cap rose by £693 from April 1 this year for around 22 million consumers in the UK.

Mr Lawrence said he recognised times were currently “troubling” for consumers.

Market compliance reviews are under way across the industry, he said, which will look into direct debits and whether increases are fair.

He said: “That is a very, very invasive review, we’re collecting a range of data but we’re also looking at the management control frameworks that are in place at suppliers to assess that they really do take this seriously.

“Martin [Lewis] has conducted some independent analysis and we absolutely welcome that.”

He added: “Rest assured, where I find and where my colleagues find that suppliers have not treated customers fairly we will take robust enforcement action over that.

“Because customers need to receive a fair price for their energy charged for their supplier. So we will take this very seriously. We are on it and I’m looking forward to getting the results back from our compliance work.

“We know many consumers in Scotland and across Great Britain are finding the cost of living increases very tough at the moment.

“I spend a great deal of time with consumer groups, charities and customers and I’m really aware of the pressure that everybody is under.

“Wholesale gas prices across Europe and Asia have been extraordinarily volatile and have risen to unprecedented levels over the past year, and that’s put the global energy market under severe pressure.

“As a consequence of this in Great Britain, we’ve seen a significant rise in consumer bills, with the price cap increasing by almost £700 in April for approximately 22 million customers with a further price rise expecting this October. Many suppliers simply could not cope with such a sustained price shock, with 28 suppliers exiting the market since last August.”

Mr Lawrence also told the committee he could not speculate on how high energy prices would rise in October this year.

He said Ofgem was taking steps to ensure the energy market was more resilient, following the recent collapse of a number of suppliers. The changes are being brought in “at pace” and are expected to be completed by the end of the year, he said.

Discussing fuel poverty, he said 613,000 households in Scotland were considered to be in this category and 311,000 in extreme fuel poverty.

It comes as a new study found that 220,000 older households in Scotland will have insufficient income to cover their essential spending this year.

Age UK estimates the poorest older households in Scotland will need to drastically up the percentage of their net income spent on essential goods and services from 70% in 2021-22 to 87% in 2022-23 due to higher costs of living.

Age Scotland said that without major interventions rising bills, surging inflation and increased costs of living will continue to push older households into poverty, poorer health and financial insecurity.