Survey reveals 28% of customers were overcharged an average of £121 – and move to online billing is making matters worse

Energy companies were accused of "daylight robbery" last night after a survey indicated that more than a quarter of customers are being overcharged through mistakes on their bills.

The average error was worth £121 a year in the energy company's favour, suggesting that errors benefit companies to the tune of at least £650m annually and possibly much more.

Clare Welton, from the Fuel Poverty Action campaign group, said that with average annual energy bills from the Big Six suppliers now approaching £1,500 per household after a series of price rises, she would expect the "profiteers" to charge the correct amount.

"This daylight robbery disguised as sloppy service from energy companies is yet another blow to the idea that the Big Six, or any bodies that put profit before people's needs, are in any way suitable to be running our energy system," she said.

The survey was undertaken with the help of 2,000 people around the country by the consultancy firm Consumer Intelligence. Researchers were working on a brief from the Keep Me Posted group, which is opposed to the phasing-out of paper bills.

Almost a third of those polled, 30%, found an error on their energy bill, and 28% had been overcharged by an average of £121, according to the research.

Over 40% of people who receive paper bills noticed an error on their bill, compared with just 29% of those receiving their bills online. Younger people are particularly affected by "online blindness" as only 9% of 18-24-year-olds who receive their bills online say they check them for errors, says Consumer Intelligence whose past clients include Barclays Bank and Tesco.

Judith Donovan, chair of Keep Me Posted, said: "For many, the arrival of a letter on the doormat is a welcome prompt to consider and act on their bills in a timely manner. With a high percentage of people finding costly mistakes in their bills, and energy companies squeezing customers with price hikes, Keep Me Posted is urging energy providers to give consumers the choice of receiving paper statements, which has been proven to help consumers manage their finances more effectively."

Keep Me Posted campaigns in partnership with Mind, the National Consumer Federation and the National Federation of Occupational Pensioners.

A spokeswoman for Energy UK, which represents the power suppliers, said customers who receive either paper or online bills should always check them. She also urged consumers to submit meter readings to their energy supplier regularly and, where they believe mistakes have been made, to speak to their supplier immediately.

"As a competitive industry, energy companies take customer service very seriously and all have committed to an industry code of practice to bill customers regularly and accurately. This applies to both paper and online billing," she said.

The row over errors is just the latest in a long list of complaints around the way the power companies handle money. Earlier this month the Guardian revealed that npower, one of the big six suppliers, owed its customers almost £400m at one stage last year due to direct debit overpayments. Another, British Gas, was found to have made £20m one year by keeping hold of money owed to former customers who had built up credit on their accounts.

Separately, the big six take in £1bn from their customers for some green levies while completing a fraction of the thousands of green and social measures they are required to carry out.