The energy regulator has accused suppliers of using customers’ credit as an “interest-free company credit card.”

Ofgem has announced new plans to ensure that consumers do not end up footing the bill for failed energy companies.

It has proposed new measures in the hope of preventing energy suppliers from going bankrupt and protecting customers.

Among the modifications are:

Suppliers should be in better financial shape so that they are less likely to fail in the event of a market shock.

Consumer credit balances will be safeguarded.

Green levies will be safeguarded.

Consumers will NOT bear the costs of failed businesses.

Suppliers will have greater control over “the critical assets required to run their business.”

Tighter restrictions on the amount of direct debits suppliers can charge customers

Ofgem stated that it hoped the measures would reduce the risk of suppliers going bankrupt and provide greater consumer protection.

“Today’s proposals will ensure that customers’ hard-earned money is properly protected so that a company must foot the bill if it fails, rather than consumers picking up the tab,” said Jonathan Brearley, chief executive of Ofgem.

It stated that the measures will protect consumers’ credit balances if businesses fail, so that they are not left footing the bill for failed businesses.

As energy prices began to rise last year, nearly 30 companies went bankrupt, including Bulb, which had 1.7 million customers.

It is estimated that the failures cost each UK household £94.