The independent energy company behind the retail market’s cheapest deal has shut its doors to new consumers amid concern over its mounting complaints and wafer thin cash reserves.
Iresa Energy is one of almost fifty challenger brands to the big six legacy suppliers but it has set itself apart by offering a rock bottom dual fuel supply tariff at an average price of £834 a year.
However, the company has slammed the brakes on its rising popularity after the regulator warned the company to get a handle on an increasing number of complaints from its customers.
“We told Iresa they needed to resolve this problem and have asked them to explain to us how they will ensure that it is easy for their customers to contact them and provide them with a level of customer service they are entitled to,” he said.
Iresa was not available to comment on its customer service or its decision to close the supplier to new customers.
The company’s meagre cash balance has also raised concern that Iresa may be the next casualty of rising energy company costs after the collapse of GB Energy due to the steady rise of wholesale market prices and other costs.
Iresa held just over £12,300 in cash and debt of almost £90,000 at the end of 2015 according to its most recent publicly available financial results which were posted to Companies House in September.
Ofgem has raised hackles among established energy companies by stopping short of setting minimum collateral requirements for new suppliers.
Instead it oversees a scheme which bails out the customers of failed energy companies using a safety net paid for by other suppliers, many of whom may have lost customers to under-funded suppliers offering unsustainably cheap deals.