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Millions of vulnerable customers being ripped off for basic services, Government spending watchdog says

Estimates suggest disabled people are paying up to £550 more a month for basic services than other customers with a similar usage - John Stillwell
Estimates suggest disabled people are paying up to £550 more a month for basic services than other customers with a similar usage - John Stillwell

More than four million disabled and elderly customers have been ripped off for essential services while watchdogs have failed to protect them, the Government's spending arm has said. 

A damning report published today by the National Audit Office has warned regulators must do more to stop energy, water, insurance and telecoms providers preying on vulnerable customers.

Estimates suggest disabled people are paying up to £550 more a month for basic services than other customers with a similar usage.

Continued failure to improve their position will increase their reliance on public services, such as benefits or care, creating an extra cost for taxpayers, the report concluded.

Vulnerable consumers are those who, because of their circumstances, are particularly susceptible to harm or disadvantage.

gas - Credit:  Gareth Fuller
Many of the most vulnerable gas and electric customers pay the highest prices Credit: Gareth Fuller

The report said 1.6 million energy prepayment customers - often those on the lowest incomes - self-disconnected their supply at least once a year because they do not or cannot top up their meters, while around three million disabled people had been denied insurance or charged extra because of their condition.

Although the water, energy and landline industries offer discounted prices for customers on low incomes, eligibility criteria varied among companies, awareness could be low and uptake inconsistent.

Industry-wide regulatory interventions are "often limited and inconsistent in reach and impact" it said.

Consumers spend around £136 billion annually on energy, water, telecommunications and retail financial services.

James Taylor, head of policy and public affairs at disability charity Scope, said: "Too many disabled people are currently ill-served across a number of markets including energy and insurance, resulting in higher costs for essential goods and services.

"Today's report highlights that much more action is needed to protect disabled consumers and tackle the unfair extra costs many face. Scope research shows this can amount to a staggering £550 a month."

NAO chief, Amyas Morse, said: "A significant number of vulnerable consumers are particularly susceptible to bad outcomes or experiences from regulated services such as energy, water, communications and financial services. "It can mean disproportionately high bills, lack of access or choice, and debt.

"Regulators and government, however, need to work closer together to clarify their respective responsibilities if overall support for vulnerable consumers is to be value for money."