Toto Energy collapsed this afternoon, leaving 134,000 customers in limbo.
The failure comes less than a week after the company was ordered to pay £4.5m in outstanding renewables payments.
Under Ofgem’s safety net, the energy supply of Toto Energy’s customers will continue. The regulator will choose a new supplier to take on all of Toto Energy’s customers.
So far this year, the Energy Ombudsman has received more than 730 complaints about Toto Energy. In 2018 they received 794.
Chief executive Matthew Vickers said: “The collapse of Toto Energy means it’s unlikely we will be able to help consumers who had complained to us about the company and were awaiting action from the company to put things right. In addition, as of today we can’t look at any new complaints about Toto.”
Alex Dickson, head of research at Switchcraft, said: “That Toto Energy – a company with an appalling track record – was able to purchase 43,000 new customers only three months ago is dumbfounding.
“In one foul swoop Toto Energy has lumped bill-payers with £4.55m in outstanding green fees and doubled the regulators burden in terms of the supplier of last resort process.”
He added: “These customers were acquired from the now defunct Solarplicity and are being palmed off to their third supplier in as many months. UK consumers deserve better than to be passed around and dropped like hot potatoes; lessons need to be learned. The sad fact of the matter is worse is likely to come.”
Peter Earl, Head of Energy at comparethemarket.com, said: “Such a pattern of supplier failures underlines the urgent need for new entrants to the energy market to be thoroughly vetted.”
Philippa Pickford, Ofgem’s director of future retail markets, told customers not to worry. She said: “Under our safety net, we’ll make sure your energy supplies are secure and customers’ credit balances are protected.”
Toto is the 16th energy company to go bust in the last year, with more than 1m UK customers affected.
Just yesterday, Ofgem proposed new regulations to prevent suppliers from taking on new customers without first proving they had the capacity.
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Under these reforms, suppliers would have to show they have the right resources for customer growth when they reach thresholds of 50,000, 150,000, 250,000 and 500,000 to 800,000 customers.
The rules are part of a wider package designed to protect consumers from supplier failures. Vickers commented:
“The proposals set out by Ofgem earlier this week contained lots of positives that will help to reduce the risk of supplier failures in future, but some customers with unresolved complaints are still going to be left without redress or remedy. We think this needs to be looked at.”
Main image credit: Getty