• Welcome to the LegalBeagles Consumer and Legal Forum.
    Please Register to get the most out of the forum. Registration is free and only needs a username and email address.
    REGISTER
    Please do not post your full name, reference numbers or any identifiable details on the forum.

Energy suppliers must explain direct debit charges

Collapse
Loading...
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Energy suppliers must explain direct debit charges

    Energy suppliers must explain direct debit charges

    • Ofgem criticises lack of transparency over energy charges
    • Watchdog could review licences if changes are not made




    Energy suppliers must provide better billing information. Photograph: Stephen Hird/Reuters

    The energy regulator has demanded "significant improvements" from suppliers in the way they manage customers' direct debits.
    The call follows a review by Ofgem into whether firms have been deliberately overstating customers' monthly payments in a bid to build up cash reserves.
    In a report published today the regulator said it found no evidence of this, but warned the big six gas and electricity companies it is considering licence changes if they fail to put their house in order. It has launched a consultation process to establish how best to achieve this.
    The regulator launched its investigation following a wave of complaints from energy customers last year that they had seen their monthly gas and electricity direct debits significantly increased, despite the fact that in many cases they were already in credit. When consumers complained to their supplier they found their arguments were batted away; in many cases they were told they had no choice but to pay the inflated figures.
    Ofgem said there was no evidence suppliers had a deliberate policy to demand more money from direct debit customers than they were due. However, it criticised a lack of transparency and poor communication "which has left customers struggling to understand why they are being asked to pay more".
    The regulator said it was also concerned about refund policies, and wanted suppliers to do more to make the grounds for refunds clearer and to give consumers more choice on how their credit balances can be repaid.
    Ofgem's chief executive, Alistair Buchanan, said: "Our investigation found no evidence that suppliers are recovering more money from direct debit customers than they are due.
    "However, their explanations of the payment increases and their practices on refund policies are wholly inadequate. Suppliers need to manage customers' direct debit payments much better, especially at a time when household budgets are under pressure. We are calling on suppliers to meet and beat our best practice and will take new licence powers to back this up if necessary."
    'Interest-free loans'

    Earlier this week the consumer group Which? said energy suppliers were using customers' unnecessarily high direct debit payments as 'interest-free loans'.
    In a recent survey it found a quarter of its members who paid their energy bills by direct debit were owed more than £100 by their supplier. Around 8% had overpaid by more than £200.
    James Tallack, a senior researcher at Which?, said Ofgem's demands were a move in the right direction for consumers, but the group remained concerned about the size of credits that were being allowed to build up on some gas and electricity accounts.
    "Allowing such large amounts to accumulate in the first place is unacceptable, even if the money is paid back eventually," he said. "With household budgets already stretched to the limit, suppliers need to play fair and stop effectively using their customers' money as interest-free loans".
    However, Garry Felgate, chief executive of the Energy Retail Association (ERA), said the report showed energy firms were being fair to customers.
    "Ofgem's report has confirmed that energy companies always try to balance their customers' direct debit accounts over the year, and base their payments on as much information as they are able to obtain on an individual customer's past use of energy.
    "The report will hopefully lay to rest customers' concerns about this payment method, as the vast majority of direct debit users appreciate being able to budget and pay for their energy this way."
    He added that the ERA and its members were working to address people's concerns and would continue to work with Ofgem to explain to consumers how their direct debits and other payment methods work.
    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps

  • #2
    Re: Energy suppliers must explain direct debit charges

    Originally posted by Amethyst View Post
    Earlier this week the consumer group Which? said energy suppliers were using customers' unnecessarily high direct debit payments as 'interest-free loans'.
    In a recent survey it found a quarter of its members who paid their energy bills by direct debit were owed more than £100 by their supplier. Around 8% had overpaid by more than £200.

    Thank you reminds me need to write to my energy company again they still ahve not responded to my last letter.

    I cant remember who I am with (blonde moment) the last bill they sent me wanted to increase my DD from £65 a month to £95 a month!!!! There is No WAY I am using £95's a month worth of electric...grrrr
    Dragging myself and my family back into the light with the help of Beagles.

    My Hardship Claim
    Me VS Abbey Win
    BIL HSBC Credit Card
    BIL EGG
    BIL HSBC Loan
    BIL PPI Win




    Comment


    • #3
      Re: Energy suppliers must explain direct debit charges

      Originally posted by Mochamoo View Post
      Thank you reminds me need to write to my energy company again they still ahve not responded to my last letter.

      I cant remember who I am with (blonde moment) the last bill they sent me wanted to increase my DD from £65 a month to £95 a month!!!! There is No WAY I am using £95's a month worth of electric...grrrr

      If they do not respond within 10 days they are in breech os a Guaranteed Service Standard and you are entitled to compensation at a rate of £20 per day. The clock starts running when they receive the letter

      Comment


      • #4
        Re: Energy suppliers must explain direct debit charges

        Originally posted by 9mil View Post
        If they do not respond within 10 days they are in breech os a Guaranteed Service Standard and you are entitled to compensation at a rate of £20 per day. The clock starts running when they receive the letter
        Come again? lol Could you explain that to me Ive never heard of it. Where does the £20 come from?
        Dragging myself and my family back into the light with the help of Beagles.

        My Hardship Claim
        Me VS Abbey Win
        BIL HSBC Credit Card
        BIL EGG
        BIL HSBC Loan
        BIL PPI Win




        Comment


        • #5
          Re: Energy suppliers must explain direct debit charges

          I really hate the way energy suppliers are allowed to take our money and stash it. In my case I was paying £38 P.M gas and £42 P.M leccy to EDF. It took me about 6 months to get it through to them that they were reading the meter wrong for the gas and their estimated reading for leccy was OTT. I am now waiting for them to refund the £360 they have stashed into their account. The government should never have privateized the home energy suppliers as there is no real compitition to get our business, rather a compitition to see who can get away with the highest charges for the longest. Plus when you do go into debt to these companies you get locked to their services untill you have cleared the debt.

          Grrrr,
          Hod.
          Borrow money from a pessimist -- they don't expect it back.

          Comment


          • #6
            Re: Energy suppliers must explain direct debit charges

            Originally posted by Mochamoo View Post
            Come again? lol Could you explain that to me Ive never heard of it. Where does the £20 come from?
            Utility companies operate to GSS (Guaranteed Service Standards) and OSS (Overall Service Standards).

            OS4 relates to Customer Correspondence and if a response is not made to correspondence then compensation is payable. This is at a rate of £20 per day after day 10.

            Contact your energy provider for their information relating to GSS an OSS.

            Comment


            • #7
              Re: Energy suppliers must explain direct debit charges

              Thanks 9mil - we have now stickied the info which we got off watchdog on the compensation issue - Utilities compensation for missed call out/late response to letters etc - Legal Beagles
              #staysafestayhome

              Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

              Received a Court Claim? Read >>>>> First Steps

              Comment

              View our Terms and Conditions

              LegalBeagles Group uses cookies to enhance your browsing experience and to create a secure and effective website. By using this website, you are consenting to such use.To find out more and learn how to manage cookies please read our Cookie and Privacy Policy.

              If you would like to opt in, or out, of receiving news and marketing from LegalBeagles Group Ltd you can amend your settings at any time here.


              If you would like to cancel your registration please Contact Us. We will delete your user details on request, however, any previously posted user content will remain on the site with your username removed and 'Guest' inserted.
              Working...
              X