Supplier Omni Energy automatically switched customers to rival energy suppliers, after expressing concern that it is set to cease trading soon.
In an email sent to their customers last week, the company warned that it was expecting to fail over the next month.
"We have always provided our customers with accurate information regarding their energy supply," Omni Energy told Current±. "As part of this a number of options were considered to reduce our exposure to the wholesale gas price which last Wednesday peaked at 400p a therm or approximately 13p a Kwh. The price cap has the wholesale gas price at approx 2.6p a Kwh. This is unsustainable for our business and many like us and we decided to send an update to our customers in advance of potentially entering the SOLR process."
The email explained that in the interest of minimising the impact on its customers, Omni recommended that they switch to another supplier as soon as possible.
It continued to offer to switch them to another supplier, Omni explained as it had decided to use in house resources rather than a third party switching partner to complete this. By switching over customers in the short term, Omni hopes there is a chance it can ride out the worst of the high power prices.
However the company has run into hot water, as automatically switching customers without express consent to another supplier breaches licence conditions.
“Suppliers generally cannot switch customers away without their consent, except where a supplier sells some or all of its customer book as part of a trade sale to another supplier,” added an Ofgem spokesperson.
The regulator is aware of the situation, and has spoken to Omni and the supplier has stopped automatically switching customers.
Customers had been switched to Bulb, which told Current± that it had stopped a number of switches from the supplier last week.
Omni customers were also switched to ScottishPower, with a spokesperson saying: “We’re aware of the apparent switching of Omni Energy customers to other suppliers, including ScottishPower, and [are] taking appropriate action to minimise the impact on affected customers. Ofgem has been advised of this.”
The regulator has told any customers who object to the switch to contact either their new supplier or Omni to cancel and reverse it.
Record high wholesale energy prices over the past month have pushed the energy market in Britain, with nine small suppliers folding in September alone. Within this situation Ofgem appoints a Supplier of Last Resort (SoLR), with customers automatically switched to ensure their electricity and gas supply is not interrupted and their credit balances are protected.
Omni however criticised the SoLR process, writing in its email that it is not effectively geared up to support prepayment customers. This was a key part of the company’s decision to switch customers away to rival suppliers.
"We have had a lot of positive feedback to this email and the service that we have provided to our loyal customers," Omni added.
"We then sent a further email to our customers that no switch will complete without their confirmation. All switches have since been cancelled."