Ofgem is to give consumers more powers against gas and electricity companies stopping firms overcharging some households.

The energy regulator today unveiled new rules for energy suppliers to “seal the flaws in the retail market” by stopping some customers – such as those on prepay meters and seeking off-grid services – from being charged unjustified extra costs.

Ofgem chief executive, Alistair Buchanan, said: “This is an emphatic move by Ofgem to clear the decks of obstacles that prevent consumers from getting access to the best offers.

“All consumers will be given greater power in the market and small businesses in particular will have a stronger hand to play in the market.”

Under the proposed changes, customers will be given a clearer annual statement setting out their tariff name, usage in terms of energy and amount charged, and reminding them they have the right to switch.

Doorstep energy sales will have to be backed up by written quotations with proof an offer on the doorstep is actually better.

Under a code of conduct, firms would also be bound to “not sell a customer a product or service that they do not fully understand or that is inappropriate for their needs and circumstances”.

Also they would be able to change a person’s service without explaining.

If energy providers do not agree to the principles, Ofgem has threatened to go to the Competition Commission.

A spokesperson for British Gas said the firm welcomed the proposals.

“We are looking forward to working with Ofgem and we are currently looking at the details of the proposals,” she said.

The firm added it was one of the first energy providers to address the concerns raised by the regulator.