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What is a security deposit
A ‘security deposit’ is money requested by electricity or gas suppliers as a condition of providing a supply. Gas transporters can also ask for a security deposit as a condition of connecting your premises to the mains network.
Deposits may be cash deposits, or a secure method of payment such as a direct debit or a prepayment meter. Conditions in the supplier’s licence will limit the circumstances and amounts of deposits that may be requested. Suppliers cannot ask for a security deposit if you agree to a prepayment meter, unless your conduct makes it reasonable to ask for a deposit.1Condition 27.3 SLC
A security deposit must not exceed a reasonable amount.2Condition 27.4 SLC
Deposits are held separately from your normal account and are used to offset costs for the supply of electricity or gas, usually following a disconnection. See here for the return of a deposit.
1     Condition 27.3 SLC »
2     Condition 27.4 SLC »