The UK energy watchdog Ofgem has launched a new crackdown on energy suppliers, proposing a raft of regulations to force companies to charge fairly for gas and electricity.
Under the new rules outlined yesterday, "unjustified" price differences between pre-pay and direct debit bills would be banned, and higher tariffs would have to clearly reflect the actual cost to the supplier.
However, campaigners said millions of elderly people would continue to pay too much because the measures, which are under consultation until July, won't come into effect until next winter.
Age Concern spokesman Patrick South said: "Older people who pay by cheque or cash, or those on pre-payment meters, have been paying over the odds for years. We really need to see action on this as soon as possible."
Ofgem also wants energy companies to offer simplified tariffs to make it easier to switch providers, and an annual statement would have to be provided to remind the customer of their right to change providers. Doorstep sales would have to be followed by a written quote and any claims by salesmen about their prices would have to be supported by evidence.
Energy suppliers would also be stopped from offering overly complicated or confusing deals, and small businesses would be given clearer contracts, which would no longer be automatically renewed when the agreement ended.
Ofgem's chief executive Alistair Buchanan said: "This is an emphatic move by Ofgem to clear the decks of obstacles that prevent consumers from getting access to the best offers."
The results of Ofgem's consultation will be published next month, with a final package due to be unveiled in May. This would allow new measures to be brought into effect before winter.
Ofgem said that it was "reasonably confident" that energy companies would agree to the changes, but that it would be take them to the Competition Commission if they did not.
Energy secretary Ed Miliband said that the UK Government was ready to use legislation if the latest measures failed to stamp out unfair practices.
The proposals follow Ofgem's investigation into unfair energy pricing that began last year, when it blasted energy companies for failing to cut unfair prices quickly enough in December.
It wanted an end to premium prices for pre-paid systems, which would see more than £500m cut from bills.
However, the National Housing Federation warned that the proposals could be "disastrous" for millions of pre-payment customers in the UK, claiming that bills could actually rise as a result of the new rules.
Assistant director Bob Wilson said: "These proposals will give the Big Six the perfect excuse to increase their pre-pay charges again and could result in dramatically higher prices."
Currently, the federation said, E.ON, ScottishPower and npower do not charge higher rates for pre-paid meters, but the other companies still impose a premium.
Ofgem said that, in future, any extra charge for pre-paid meters would have to be proportionate and transparent.
A spokesman said that the cost of installing and maintaining a pre-paid meter was around £85 a year, and that any premium should be limited to around this level.
Garry Felgate, chief executive of the Energy Retail Association, which represents energy suppliers, said: "Energy suppliers have already taken significant action following the original probe findings, including reducing their tariffs on pre-payment and electricity-only tariffs by £300 million.
"The regulator has stated on many occasions that we have the most competitive market in the world, with 100,000 people switching each week.
"Any measures which support competition in the market can only be good news for consumers."
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