Scandal of collapsed Avro Energy revealed: 'ripping off' customers, millions in loans to related firms, complaints from customers and thousands left with higher bills

The ‘rip off’ merchant at Avro Energy was using customer cash to loan other businesses If you read the comments left on the Avro Energy website you quickly get an idea that it wasn’t just the high price of gas that forced it to cease trading. Customers have complained of having hiked energy prices in the last few months while others have paid much more than they needed to leaving them in credit. Now the firm have gone bust they are wondering if they will be re-imbursed by the new supplier.

However, Ofgem say they will get back any money they had in credit with the collapsed firm. The Times has investigated the family who ran the company and it’s ‘dodgy dealings’ such as lending cash to related businesses despite being in financial difficulties itself. The newspaper reported: “The young boss of a collapsed energy company that has left more than 580,000 families fearing higher bills this winter is at the heart of a web of firms that appear to have led to his family earning millions of pounds. Jake Brown, a 27-year-old former non-league footballer, founded Avro Energy in 2014 while studying law at Birmingham University.

The collapse of Avro’s consumer division on Wednesday was the biggest failure of a household supplier. Experts predict that customers could face up to £400 a year more on their bills.” Ian Carrotte of ICSM said the energy supply market had become a ‘wild west’ with dodgy dealings going on as scores of firms took advantage of deregulation.

He said: “The likes of Jake Brown have been taking the Michael and ‘ripping off’ their customers. Energy is so vital to businesses and the self-employed. There are many firms who have effectively given Avro interest free loans when they can least afford it. With these companies going down they leave suppliers unpaid, unhappy customers, families and businesses facing higher fuel prices and the market in disarray – and of course the staff out of work.”

He advised anyone looking to supply an energy firm with goods and services this winter to be very cautious as they may not get paid if they company collapses.

The BBC reported: “An Avro customer in a household using a typical amount of gas and electricity, who got a fixed rate deal in August, would have been paying £1,087 a year, according to price comparison site Uswitch. In March, they could have got a deal costing £920 a year. Now Avro has collapsed, they are likely to be paying £1,277 a year at their new supplier from 1 October, in line with Ofgem's price cap.”

Meanwhile there was more bad news as reported in the Daily Mail as the Business Secretary Kwasi Kwarteng has indicated that every consumer and business customer is likely to end up paying a levy to cover the costs of the collapses in the market of energy firms.