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Energy Direct Debit - Check payment amount

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By *rFunBoy OP   Man
over a year ago

Longridge

OFGEM Announcement.

You may have heard in the News that a number of Energy companies have been ramping up Direct Debit payments on Variable contracts by up to 100%.

Logically, if Energy prices rose 54% in April then this is the max value Direct Debit increase they should have applied.

Work out what you were paying in March and if this more than 54% to what they increased, contact your supplier, lodge a formal complaint and demand a refund of the additional payment value if you are in Credit.

When (if) prices fall once things calm down, I suggest moving your supplier to a company not willing to line its own pockets at your expense. They increased payments on your back to put more money in their bank accounts and wholly wrong.

You could also push for a Good Will payment if they've caused you hardship.

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By *oo hotCouple
over a year ago

North West

It has been a perfectly normal procedure for years to pay a fixed direct debit every month for energy.

This means that you pay way more in summer than you actually use and this buffers the amount that you need to pay in the winter.

Personally I don’t mind an arrangement like that knowing that bills are going to be huge next winter.

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By *V-AliceTV/TS
over a year ago

Ayr

Or you could just avoid paying by direct debit altogether. It's not a legal requirement.

Pay for what you actually use each month, by submitting new meter readings. That automatically generates a new bill - with Scottish Power, anyway.

I've been doing that for over five years. My money is my money, not theirs. So, I don't allow them to inflate their bank balance with it, when I could be spending it on food or petrol.

I am aware that, as a member of the working poor, I am in a minority; but no direct debit has worked for me.

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By *V-AliceTV/TS
over a year ago

Ayr

Yep. It's basic fleecing - they don't care about you; only your money.

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By *V-AliceTV/TS
over a year ago

Ayr


"It has been a perfectly normal procedure for years to pay a fixed direct debit every month for energy.

This means that you pay way more in summer than you actually use and this buffers the amount that you need to pay in the winter.

Personally I don’t mind an arrangement like that knowing that bills are going to be huge next winter."

It's not normal. They just want you to think it is - and, circumstances have changed.

It's a system that works for people who are wealthy enough not to notice, or care - because they've paid all their bills, no problem, and that extra £100 sitting in the energy company's bank account is an investment, unmissed.

If you're content to do it, great.

But don't call it normal. It was never normal to "save up", which is what this, effectively, is - in order to pay your energy bill.

Do you think they would be doing it at all if it was only the customer who benefited?

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By *V-AliceTV/TS
over a year ago

Ayr


"OFGEM Announcement.

You may have heard in the News that a number of Energy companies have been ramping up Direct Debit payments on Variable contracts by up to 100%.

Logically, if Energy prices rose 54% in April then this is the max value Direct Debit increase they should have applied.

Work out what you were paying in March and if this more than 54% to what they increased, contact your supplier, lodge a formal complaint and demand a refund of the additional payment value if you are in Credit.

When (if) prices fall once things calm down, I suggest moving your supplier to a company not willing to line its own pockets at your expense. They increased payments on your back to put more money in their bank accounts and wholly wrong.

You could also push for a Good Will payment if they've caused you hardship."

Direct Debit, as a payment method for anything - goes back to 1964.

Does anyone know the first time the energy companies were able to take more money than you actually owe them - if you consented to it - via DD?

I've not been able to find out but I suspect it's fairly recent, due to increased accuracy in meter readings.

And increased complacency in the public.

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By *ercuryMan
over a year ago

Grantham

Years ago, I told my energy supplier that I wanted to pay by Standing Order.

They were most unhelpful on the matter!

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By *ealthy_and_HungMan
over a year ago

Princes Risborough, Luasanne, Alderney

it didn't go unoticed that energy providers changed the language they use from customers to account holders. shortly after that they started to demand that account holders accounts must be in credit.

it appears that energy providers are attempting to remodel themselves as banks.

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By *rFunBoy OP   Man
over a year ago

Longridge


"It has been a perfectly normal procedure for years to pay a fixed direct debit every month for energy.

This means that you pay way more in summer than you actually use and this buffers the amount that you need to pay in the winter.

Personally I don’t mind an arrangement like that knowing that bills are going to be huge next winter."

With due respect, you've missed the point and these companies are facing substantial fines.

Yes, we build credit over Summer to pay for Winter as a kind of rolling average. If annyal consumption itself remains the same then if prices rise 54%, why has Direct Doubled by 100%?

Example: prior to April, say an annual average Direct Debit was £100 and was pretty close in how much excess credit remains for rainy day over the 12 months.

Prices increase April 1st by 54%, but the Direct Debit has not been increased to £154, it had doubled to £200. This means over the year, credit is going to grow by £500.

1) Many people can't afford to 'stash' £500 unnecessary into an Energy companies bank account.

2) This also creates another problem, taking an additional £500 per year off the customer base, becomes a substantial amount of 'liquid cash' for the company to pay its bills but should that company fail - every other UK customer has the 'loss' added to Standing Charges.

On average, we're all paying £96 a year more on our bills as Standing Charges to cover Credits lost when companies fail.

Why am I being being forced to compensate Grannies 'rainy day fund'. Any other company goes bust with your money, irs tough shit, you loose it.

So these companies are being forced to return the money they've extorted by increasing and arguing Direct Debits to be fair to its customers in that over the year they pay the right average and to protect others with other companies from significantly increased Standing Charges.

A neighbour was with a company that went bust with accrued Credits of £1200. After being transferred to 'supplier of last resort' and put on Capped rate, about 6 weeks later, £1200 was Credited to their account.

The money was given by OFCOM, who then recover this via Standing Charges. So allowing companies to 'force' Credit accrual to give them some spare cashflow put us all at risk, as already been proven.

Before anyone spouts off the Standing Charges are not used to compensate losses, it is on OFGEMs website, over the media and also in an email I received from them in May.

If people want to build up Energy Credits, put it in a piggy bank, not risk putting prices up for everyone.

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By *rFunBoy OP   Man
over a year ago

Longridge

@TV Alice.

In days back then, you got a quarterly bill, it either got paid at the amount shown on the bill by Direct Debit or you took the bottom of the bill to a Post Office yo pay over the counter.

I mentioned an argument with Scottish Power. This was an elderly relative who over the last 2 years, has had substantial work done to her home. Steamers for wall paper removal, electric heaters over winter while Central Heating renewed, heat guns for paint stripping meant her annual average increased by 2,000kwhs electric.

Now the work is finished, the annual consumption is falling back to the nominal 1,500kwhs. Although monthly meter readings are lower than when first started, rewire, energy efficient lighting, insulation etc, the average is falling more slowly.

Scottish Power automatically increased the Direct Debit based on annual averages. My argument was that the next 12 months average is actually going to be less and to reduce the Direct Debit to reflect this and any shortfall will be "paid manually".

They finally agreed looking at consumption 3 years ago that the DD value their system dreamed up, would be massively over paying and as such, agreed to reduce on promise shortfall would be covered.

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By *rFunBoy OP   Man
over a year ago

Longridge

More info:

https://www.ofgem.gov.uk/publications/press-release-ofgem-requires-improvements-energy-suppliers-customer-direct-debits?embedded_webview=true

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