OT: Energy Company Direct Debits

I have a Fixed contract with OVO Energy, which I set up with them in about April, for £118 per month.

They have just emailed me to say that this will be going up by £30 pm from October "to make sure that I don't owe them money by March 31st next year". How kind of them to think of my financial wellbeing.

Are they allowed to do this? To go into my bank account and filch what they fancy, whenever they like? (And I guess that the answer will be "of course they are: you signed up for it in your T&C"). (And equally, of course, I was not aware of that.)

This feels like barefaced robbery: I would rather any deficit that _may_ build up be paid off by myself, when they ask for it if it actually hapens, so that that my £30 per month is earning interest for me, and not for them.

(BTW the current £118 was suggested by _them_ in April when they offered me this "Fixed" contract.)

I suppose you are all going to tell me that all I have to do phone their Helpine .... which is in India, and whose employees, judging by the couple I had to speak to in April, cannot pronounce English in a way that I can understand, and are arrogant into the bargain.

Any offers of advice? (Other than "grit your teeth, Johnny")

A.J.

You will probably be on a fixed price contract in that the price of the units and the daily standing charge cannot change during the contract. What you pay depends on how many units you use.

You will have set up a direct debit where you have given them power to take money from your account each month and you will have given them the right to vary how much they are taking too. Standard direct debit stuff.

What they are probably doing is basing the cost for the Winter period based on your consumption since April. Possibly you are using more this year than previous data they have suggests so they are changing things now rather than presenting you with a big bill later. You can dispute the rise and they will rescind it for now. But as soon as the debt mounts they will change the amount again so they don't end up with you owing them lots of money.

However, all your bluster aside, you don't appear to have the sense and understanding of how utilities and bank accounts work and therefore are probably not qualified to be in charge of the account. Maybe you should seek out a responsible adult to look after it for you?

Ask to pay for the amount used each month - variable DD .you dont buildup any credit or debits that way, just have to be able to budget for the winter peaks.

Indeed, very altruistic :-)

If you signed up for "direct debit" (aka variable direct debit), then "yes" that is what it is designed for.

If however you created a standing order, then they are not allowed (nor able) to change that.

Is this fixed "this is what you will pay regardless" or fixed "this is a fixed price per kwh, and we estimate based on your claimed usage it will amount to this per month/year"

Presumably the latter, so they can revise up or down based on actual usage.

(there is scope for a bit of bait and switch in here - quote a low annual cost to win the deal, the revise upward based on real usage data rather than based on estimated (unrealistic) forecast usage data.

You may be able to get them to reduce it if you ask.

Other than by having an accurate smart meter and being debited exactly for the amount used each month, any customer is screwed (a) if they choose to pay by direct debit (b) if they choose to not pay by direct debit. With the first, as the OP found out, the utility company can take what they want (within reason) from the customer's bank account. They use the customer's money to put into a high-interest earning account, and at the end of the year return only the capital to the customer to balance things out. With the second, they put the customer on a higher cost tariff than a DD tariff, for electricity and gas which costs the utility company the same for both tariffs. So it's a nice little earner for the company either way. Why am I not surprised?

The won't do this because they need to ask. That requires intervention, sending you a bill, checking you have paid. Expensive...

The whole point of a Direct Debit is that its an "exception alert" system. They only get told when it fails.

Many companies will let you pay the actual amount, but they will charge you more for your electricity.

switch to a company with a UK call centre. I wonder if you are with British Gas. Try Octopus, eon.next, well any one else..

Like I say paying this way is usually a condition of the contract. Some companies, for example Octopus will do a direct debit for the actual amount, but they may require you to have a smart meter so then can ensure you are not fiddling the readings.

Dave

Just to say that "direct debit" doesn't necessarily imply a fixed monthly amount. I'm with E-on Next with a smart meter and get billed for the actual consumption each month which is taken by DD.

nib

In message <109ktb8$3g6ph$ snipped-for-privacy@dont-email.me, at 22:27:04 on Sun, 7 Sep

I've been with Octopus about two years, during which time they point blank refuse to fix my broken Smart meter. But they do let you adjust the monthly recurring payment online.

I send them readings every couple of months, especially on dates when the cap changes.

Currently they owe me about £700, and it's not clear how I can get them to repay me.

I don't know if you still can, but you used to be able to ask for a Direct Debit mandate form which you filled in & gave to your bank. The form had a box for filling in a maximum amount.

Same on-line 'payment' page where you select the option to change your DD amount

It's perhaps confusingly labelled "can I refund some credit"

quote You can refund as much as you like, but it might increase your monthly payments later.

Once confirmed, you should receive the money within 7 days, but it can take up to 2 weeks.

Octopus’ web site also has a ‘payment forecast’ facility, which lets you put in DD amounts and then graphs the credit or debit over the next 12 months.

In conjunction with the online change-of-DD facility, you can play the system to stay marginally in the black.

Indeed. There are no 'use as much energy as you like for a fixed price' tariffs out there.

(there are some weird ones where you have solar with a battery and they give you a fixed price based on letting them control it. I doubt that applies here)

I don't see how they can do that - if you gave them an annual kWh figure when you signed up, they multiply that up by their unit rate which gives you the annual cost. If you use that number of units the cost will match the projection.

I suppose there could be leeway if you just said 'I have 3 bedrooms' and let them estimate how many kWh - maybe they could estimate too low. But Ofgem has predefined kWh numbers for those low/medium/high situations so there's less scope to deviate:

- plus they may be able to read your actual last year's consumption from a database which gives an exact figure.

If it's a smart tariff with a variable unit rate based on the weather or time of day then that could be more complicated, but again you likely knew what you were getting into there.

Theo

Yes. However you CAN unilaterally cancel a direct debit with your bank and simply not pay them.

But my supplier (EDF) does exactly the same thing.

Its one way to make their tariffs look cheaper.

You aren't especially being ripped off: Electricity suppliers are not making gargantuan profits. You are just paying for everybody else's solar panels and windmills.

There has never been such a thing. Electricity suppliers only allow a variable direct debit. There are (or were) other forms of direct debit but the rules are so complex that most suppliers avoid them like the plague.

Both eon.next and octopus allow you to have a monthly bill and pay for the actual amount used, BUT as they now get no interest and have no buffer if you default, the rates will usually be higher.

Dave.

No they must give you notice. You can then cancel the direct debit.

(And equally, of

'Pay on receipt of bill' is the old paper billing system (whether paper or online) - you can send them a cheque, pay by bank transfer etc. This costs more, not least due to the processing fees and the needs to chase arrears.

Monthly variable direct debits, which are auto-adjusted to match your previous month's bill, don't cost extra. I think Octopus offers them - you just have to ask for your DD to be a variable amount rather than a fixed payment plan. There may be a setting for that on the website or else you need to ask customer services.

I think some other suppliers offer them too - can't remember offhand.

Theo

Exactly. There is a greater risk you will default before they can collect the money A direct debit is a guarantee that you are still solvent.

If you give the a kwh figure, then yes there is less scope there...

I wonder how many people actually know how much they use?

quote - not necessarily even with malice. An average figure will be at least a bit wrong almost all the time, and significantly so at least half the time.

They may also apply different thresholds for raising and lowering payments. (bit like when the tax man owes you money and they pay far less interest than when you owe them!)

They might - and possibly even factor in "degree days" data if they have it for the area. However in many cases that may not help much. Changes to the occupants, or their usage patten, changes to the property or appliances etc.

Tariff complexity is a good way of obscuring how much it will cost in reality.

Well I’ve been with them for about 5 years and have had four repairs.

I think a lot depends on how you approach them and if you have a real need for a smart meter. As an EV owner and now with Solar power, battery and heat-pump, a working smart meter is very important to me.

I always contact them via Twitter. Keep it really polite and make your case and be persistent. Remember, it’s not their fault that we’re lumbered with crappy smart meter technology. They’ll have lots of customers with non-functioning meters and it’s very much a case of “the squeakiest wheel gets the oil”.

What, other than the “Return money to my bank” button on the “Bills and payments” page of the app? If that doesn’t work, again, contact them via Twitter.

Tim