A green energy firm with more than 29,000 customers has collapsed, becoming the sixth supplier this year to go bust.
Eversmart Energy confirmed it had ceased to trade in a short note on its website on Friday.
Industry regulator Ofgem said it would appoint a company to take on all of Eversmart’s customers, advising them not to switch to a new provider until this process was completed.
The collapsed firm supplied energy to 29,000 households and “a very small number” of businesses, Ofgem said.
Philippa Pickford, the regulator’s director for future retail markets, said: “Eversmart Energy customers do not need to worry, as under our safety net we’ll make sure your energy supplies are secure and domestic customers’ credit balances are protected.
“Ofgem will now choose a new supplier for you and whilst we’re doing this our advice is to ‘sit tight’ and don’t switch. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.”
Eversmart did not say why it had ceased trading, but the Energy Ombudsman said complaints about the Manchester-based firm had soared from 55 last year to 225 in the first eight months of 2019.
Energy Ombudsman chief executive Matthew Vickers said: “We have seen a significant increase in complaints about Eversmart Energy, receiving four times as many complaints so far this year as we did in the whole of last year.
“Billing and switching problems have been the main drivers of unresolved complaints about the company.”
Eversmart was named the second worst supplier for customer service in a report by the Energy Ombudsman last year.
Last year the firm was criticised for launching a low-cost tariff in which households had to pay about £1,000 for a year’s worth of energy up front.
Bosses said at the time claimed the tariff was “better value than an Isa or a high street savings account”, but Citizens Advice warned the rest of the industry would be forced to pick up huge outstanding debts if the supplier went bust.
It is not known if the supplier who picks up Eversmart’s customers will honour the 12 per cent interest they were promised, or how many of the 29,000 customers were on the tariff.
Eversmart is the 13th supplier to drop out of the UK market since the beginning of last year. Its collapse comes three weeks after competitor Solarplicity ceased trading.
Gillian Guy, chief executive of Citizens Advice, said: “Our research shows this unlucky baker’s dozen of failed companies has left behind at least £172 million in unpaid costs. These will be picked up by other consumers through higher bills.
“When a supplier goes bust, customer credit balances are protected. But all of us will eventually pay for honouring them through increased bills.
Ofgem warned last month more providers are to go bust or merge after a huge increase in the number of small firms entering the market in recent years. The regulator announced stricter tests on new suppliers’ financial health earlier this year under proposals designed to stem the rising number of failures.
Emma Bush, energy expert at price comparison service uSwitch, added: “With yet another supplier going out of business, Ofgem needs to press ahead with its reforms for regular health checks on existing energy companies to ensure each and every one can finance its operations while upholding a high level of customer service.
“Regular stress-tests for suppliers and ongoing fit-and-proper person assessments would help that.”