Security deposits, credit checks and what happens if your electricity supplier fails

Businesses are normally placed on a deemed contract with the appointed supplier, and your old fixed price doesn’t automatically carry over. Deemed rates can be higher because the supplier is taking on customers it hasn’t priced for. Ofgem says you can shop around once the new supplier contacts you, and you won’t be charged exit fees for leaving the deemed arrangement.

Yes. Once the new supplier has been appointed and has written to you, you can agree a contract with them or move to another supplier without exit fees. The practical step is to wait for confirmation of the appointment and your new account details, then compare what the appointed supplier offers against other suitable contracts on the market.

It’s worth comparing both. The appointed supplier will often offer a fixed contract quite quickly, and it may be perfectly reasonable. Look at the unit rate, the standing charge, the term, whether non-commodity costs are fixed or passed through, and any broker fee shown in the principal terms. Comparing the same basis across several suppliers is the only real test.

Have your MPAN, the site address, company registration details, the meter reading you took on the failure date, and an idea of annual usage from old bills. The new supplier’s welcome letter is useful because it confirms the account and start date. If you’ve lost access to the old supplier’s portal, previous invoices or your meter itself will usually give everything needed.

A switch typically takes a few weeks to complete once you’ve signed, though the price can be agreed on the day you accept a quote. Until the switch completes you’ll pay the appointed supplier’s deemed rates for the energy you use. Starting early, and giving accurate details first time, helps avoid delays caused by registration queries or a mismatched address.

Yes. Clearsight Energy can compare suitable contracts for your site, including the appointed supplier’s own offer, so you can see them side by side on the same basis. Your MPAN, address, usage and the date your account moved are enough to start. We’ll explain the terms, the price basis and the fee before you decide anything. Get in touch →

Businesses aren’t protected in the same way households are. Ofgem says the failed supplier’s administrator is responsible for business credit balances, so recovery isn’t certain. Ofgem tries to appoint a supplier that will honour credit, but that can’t be relied on. Keep your final statement, the meter reading and any payment records, as you may need to claim from the administrator.

Check whether the appointed supplier has taken on your balance first. If not, contact the administrator named on Ofgem’s update or the old supplier’s website and register a claim as an unsecured creditor. You’ll need your account number, the failure-date meter reading, your last bills and proof of payments. Payouts from administrations can be partial and often take months.

Ask to be billed on actual reads, ideally from a smart or advanced meter, so payments track real use. Review direct debit amounts after each statement and ask for any large credit to be refunded. Keeping a regular file of reads and bills also makes any future dispute or claim far easier, whether or not a supplier ever fails.

Clearsight Energy’s bill validation can reconcile the old supplier’s final bill against the appointed supplier’s opening read and your own records. It helps spot double charging, estimated reads and missing credit before you pay or submit a claim. Send the last bills from both suppliers along with your meter photos, and we’ll set out anything that doesn’t add up. Get in touch →

Yes, a debt doesn’t disappear. Ofgem explains it may move to the appointed supplier if they agree to take it on, otherwise the old supplier’s administrator can still collect it. Wait for written confirmation of who holds the balance before paying, and check the figure against your own reads so you aren’t paying an estimate.

Clearsight Energy can review the balance against your contract rates, meter readings and payments so you know whether it’s right before you pay. Errors at supplier failure often come from estimated closing reads or payments that weren’t allocated. Send the statement and your records, and we’ll explain what we find and how to raise it. Get in touch →

It’s usually linked to your expected consumption and how often you’re billed. Ofgem notes many suppliers base deposits on about three months of estimated use, and quarterly billing can mean a larger deposit than monthly billing. The figure should reflect the credit risk the supplier has assessed, and they should be able to explain the method if you ask.

Sometimes. Ofgem’s guide encourages suppliers to consider alternatives, such as monthly billing or direct debit, instead of a deposit. Suppliers also differ in how much risk they’ll take, so one may ask for a deposit where another doesn’t. Some will accept a director agreeing to be personally liable. Providing management accounts or trading history can help a supplier reassess you.

It’s a real risk, as it means you can be pursued personally if the company doesn’t pay its energy bills. Read exactly what’s covered, whether it’s capped and whether it ends with the contract or continues into any rollover. Many directors prefer to pay a refundable deposit instead. If the sums are large, it’s sensible to take independent legal advice before signing.

It varies, and credit appetite changes over time. Some suppliers will quote a new company with a deposit, others will ask for director details or personal liability, and a few will decline until accounts are filed. Comparing several at once saves you applying one by one, and avoids repeated searches that can be frustrating when you just need power on.

Clearsight Energy can approach suppliers on your behalf and show which will offer a contract, with or without a deposit, and on what terms. Your company number, director details, MPAN and the premises address are usually enough to start. We’ll lay out the options and the fee clearly so you can choose what suits your cash flow. Get in touch →

Ofgem’s best practice is for suppliers to review a deposit when your financial position improves and refund the difference where risk is lower. When you leave, the deposit should be offset against your final bill rather than leaving you to chase it. A good payment record over the first year is often the strongest evidence for a review.

Write to the supplier asking for a credit reassessment, and include recent accounts, your payment history and any change such as a longer trading record. Ask them to explain how the original figure was calculated. If you’re not happy with the response, use their complaints process, and small businesses can then take an unresolved complaint to the Energy Ombudsman.

Yes. At renewal, Clearsight Energy can check which suppliers will offer suitable contracts based on your current credit profile, and whether a deposit would be needed. Your trading history since the first contract often helps. Share your MPAN, end date and latest accounts, and we’ll set out the options, the terms and our fee before you decide. Get in touch →

Common reasons include a very new company with no filed accounts, county court judgments, late filing at Companies House, or a registered address that doesn’t match the supply address. Directors’ histories can also play a part. Checking your company’s public record and correcting simple mismatches can help, and different suppliers use different criteria, so one decline isn’t the end.

Not necessarily. If one supplier declines, another may accept with a deposit or other security, and some offer shorter terms for higher-risk customers. Staying on deemed or out-of-contract rates for months is usually the costliest outcome, so it’s worth getting several suppliers to look at your application rather than waiting for accounts to be filed.

Clearsight Energy can put your details to suppliers with different credit criteria and show which will offer a contract and on what terms, including any deposit. We’ll be clear about what’s realistic for your profile. Your company number, MPAN, address and an idea of usage are enough to start, and we explain our fee alongside the options. Get in touch →