[Finance] Paying energy bills by direct debit - scam?

[Papak]

My DD goes out monthly but my bill is quarterly so whilst I have ~£500 credit now I know that is going to be wiped out next time they bill me. To be fair to them my monthly DD that has risen quite substantially is pretty close to what I pay quarterly.

Do you mean your DD is equal to your quarterly bill or equal to 1/3 of your quarterly bill?

I presume the former in which case why don't you reduce it based on your proven consumption?

 

[Bozza]

As others above, I’m of sure it’s a scam or anything like it.

Our dual fuel DD is £225 per month and we currently have a credit balance of £1,006.

However based on current usage, we will use c£500 of energy this month. Rather than having to find that £500, our credit balance will be eaten into.

Project that into January, February and March and we will very probably be levels-your-devils by the time things start warming up.

 

[Neville's Breakfast]

I have a smart meter and am with Ovo energy, having switched a year ago using the advice of Martin Lewis.

I just checked my latest bill. An amount was taken by direct debit. The result is that my starting balance has fallen by ten quid.....

....Instead of being £490 in credit, I am now £500 in credit.

Wondering what the actual f***, I just gave them a call. After taking another couple of hundred quid off me by direct debit I am now in fact £670 in credit.

The explanation is that this estimate is based on my last year's usage (before I was with Ovo) and uses an algorithm. They kindly offered to give me £500 refund.

I had no idea this sort of tomfoolery takes place. Luckily I can afford to pay my bills, but I wonder how many other people are being ripped off like this?

The reason I use Martin Lewis' site for bills is because ten years ago I found that because I simply renewed my home insurance each year with the same insurer, without paying any great attention to the charge, the insurer took the liberty of cranking up the charge every year. Chatting to a neighbour I discovered I was paying more than £1,000 a year more than him. I called my insurer and they offered to lower the charge by £600. I mean, what the actual f***? I went elsewhere and saved another £300 on top of that. There ought to be laws against this sort of thing. I may be a bit odd, but I'm not exactly in the vulnerable and elderly bracket. I wonder how many people are being ripped off?

Check your direct debits, folks!

If you ring them they will always change it. My Ovo bill has regularly forecast I will end the year with a debit because we had 5 adults in the house last winter. As you say it is based on previous year usage. That’s an entirely reasonable starting point. I just ring every 3 months when they say they want to raise the dd and every time they agree to lower it instead. It isn’t a scam. It’s also worth noting that smart meters don’t seem to work. I submit manual readings every 3 days on the website.

 

[Arthur]

Do you mean your DD is equal to your quarterly bill or equal to 1/3 of your quarterly bill?

I presume the former in which case why don't you reduce it based on your proven consumption?

No the latter. If I was paying 3 times the amount I was due to be paying a quarter I certainly would be on the blower to them.

 

[The Andy Naylor Fan Club]

We had a smart meter installed just over 3 years ago and every bill since has been estimated. Not so smart.....

 

[dazzer6666]

They can no longer charge existing customers more than new ones.

https://www.moneysavingexpert.com/news/2021/05/-insurers-banned-charging-existing-customers-more--new--loyalty-/

My advice would be if you have not had a claim to compare your renewal premium with a brand new quote and with other companies on one of the comparison sites. If you have had a claim then you will pay at the same basic rating as a new customer but will not have a no claims discount (or you'll have an additional risk premium component) so it will be (legally) more.

That doesn’t really matter though……your existing company is highly unlikely to be the cheapest when you renew in my experience (I’ve literally never found that to be the case when getting new quotes and have moved companies every year fro as long as I can remember). A new insurer will likely want your business - so you’ll probably pay less…….and takes 2 mins to get a new quote.

 

[Papak]

That doesn’t really matter though……your existing company is highly unlikely to be the cheapest when you renew in my experience (I’ve literally never found that to be the case when getting new quotes and have moved companies every year fro as long as I can remember). A new insurer will likely want your business - so you’ll probably pay less…….and takes 2 mins to get a new quote.

Would you be kind enough to share the standing charge and energy rate per kWh to your current electricity and gas provider(s) and what you were paying in the contract(s) immediately before? Thanks.

 

[Guinness Boy]

That doesn’t really matter though……your existing company is highly unlikely to be the cheapest when you renew in my experience (I’ve literally never found that to be the case when getting new quotes and have moved companies every year fro as long as I can remember). A new insurer will likely want your business - so you’ll probably pay less…….and takes 2 mins to get a new quote.

Only the most recent renewal cycle is covered by the change in the law though. Before then all new customers got cheaper premiums.

But, to be clear, what I was suggesting is to do a new quote as a new customer for your exact cover with your current provider, and compare that to the renewal price, to ensure they are complying with the law and THEN also doing new quotes on CTM or similar to get other comparisons. BUT - the cover has to be identical. I know a lot of people who got "cheaper" cover by losing a claimable peril, increasing an excess or forgetting to protect their no claims. It's like comparing an apple to a sausage.

 

[arewethereyet?]

Not sure there are ‘deals’ to be had with energy suppliers currently …I note the OP had a happy ending (lucky chap) ..I’m with OVO and have at least found their customer service to be very good and at least open to negotiation

Ok, back in the day before the current crisis, I agree but OP appeared to be completely in the dark that he was being ripped off and assumed he was getting a good deal each year.

 

[dazzer6666]

Only the most recent renewal cycle is covered by the change in the law though. Before then all new customers got cheaper premiums.

But, to be clear, what I was suggesting is to do a new quote as a new customer for your exact cover with your current provider, and compare that to the renewal price, to ensure they are complying with the law and THEN also doing new quotes on CTM or similar to get other comparisons. BUT - the cover has to be identical. I know a lot of people who got "cheaper" cover by losing a claimable peril, increasing an excess or forgetting to protect their no claims. It's like comparing an apple to a sausage.

Yep……..easiest option is to have an account with a comparison site.

 

[dazzer6666]

Would you be kind enough to share the standing charge and energy rate per kWh to your current electricity and gas provider(s) and what you were paying in the contract(s) immediately before? Thanks.

Comment above is in relation to insurance quotes/premiums not energy……

 

[arewethereyet?]

100% this on energy, we are all pretty much in the same situation except those who are on fixed rate deals which will probably all expire within 12 months from now.

Yup, mine expire beginning of March next year so I’m benefiting from the £400 grant thats being paid each month, currently building up a decent credit for when the old DD increases with additional top ups each month.

 

[Elbow750]

Nuclear fusion – live: Scientists to reveal 'limitless clean energy' breakthrough​

Follow live updates as scientists are poised to announce a major breakthrough that it is thought could lead to "basically unlimited" carbon-free energy

Sky News


12:09

Scientists due to reveal 'holy grail' scientific breakthrough​

In a news conference scheduled for around 3pm UK time, the US Department of Energy is set to announce a "major scientific breakthrough" at the Lawrence Livermore National Laboratory in California.
It is one of several sites worldwide where researchers have been trying to develop the possibility of harnessing near-limitless energy from nuclear fusion.
Excitement around the announcement is based on the fact that it is a technology that has the potential to one day accelerate the planet's shift away from fossil fuels, which are the major contributors to climate change.
Developments to date with the technology have repeatedly been beset by daunting challenges.
However, it is believed that today's revelations could signal a seminal shift in the move towards what scientists have described as a "holy grail" of carbon free power.

Be very aware of this report. The following appears at the end of the BBC news website:-

' The experiment was only able to produce enough energy to boil about 15-20 kettles and required billions of dollars of investment. And although the experiment got more energy out than the laser put in, this did not include the energy needed to make the lasers work - which was far greater that the amount of energy the hydrogen produced.'

So the experiment got more energy out than was input if you ignore the massive amount of energy required to run the lasers. How on earth this can be reported as getting out more energy than was put in I don't know!

This reminds me of the hype over nuclear power when I was at school. I recall architects started to design buildings without light switches, as it would be more expensive than leaving the lights on 24/7.

 

[Harry Wilson's tackle]

Essentially all they are trying to do is smooth your payments so they stay the same throughout the year - build up a credit balance through the summer then use it up during the winter. Huge price movements have buggered up their algos to quite a degree though so people will end up paying monthly amounts that might be some way off their annual average cost/12, resulting in accounts hugely in credit or requiring big monthly payments.

Insurance is different - companies rely on customer inertia, the ‘auto renewal’ option sounds attractive because you have no hassle and won’t forget to do it but it means they can keep nudging the price up. Always get new quotes pre-renewal, will usually be cheaper (then the scamming bastards at your existing company will try to keep you by matching whatever quote you’ve had). Exactly the same with car insurance.

I understand the bit about keeping the bills smooth, but that means I should now, in winter, be using much more than my DD is pulling, but the opposite is the case. Anyway, they were happy to offer a refund.

With the insurance, I know now, but didn't know then, that you should never accept the first offer and should shop round every year. I naively thought that, as a customer of nearly 20 years, I would be on the best deals. Pitiful, I realize, now. At some point the standard of transactionary engagement here changed from the English way of establishing a position as a loyal and trusted customer in exchange for loyal and fair custom, to some sort of bazaar haggling system.

 

[Elbow750]

As others above, I’m of sure it’s a scam or anything like it.

Our dual fuel DD is £225 per month and we currently have a credit balance of £1,006.

However based on current usage, we will use c£500 of energy this month. Rather than having to find that £500, our credit balance will be eaten into.

Project that into January, February and March and we will very probably be levels-your-devils by the time things start warming up.

This is pretty much the same as me. My monthly bill of £260 (smart meter & dual fuel) came in yesterday, but I'm still £960 in credit with a monthly DD of £192 (after the govt £67 is knocked off). But with this cold snap and a low power generation from my solar panels, big bills for Dec / Jan and Feb await. which means I'll be about evens by April..

 

[dazzer6666]

As others above, I’m of sure it’s a scam or anything like it.

Our dual fuel DD is £225 per month and we currently have a credit balance of £1,006.

However based on current usage, we will use c£500 of energy this month. Rather than having to find that £500, our credit balance will be eaten into.

Project that into January, February and March and we will very probably be levels-your-devils by the time things start warming up.

We’re £889 in credit atm, DD is £357 (doesn’t include the £66 rebate) and last month’s usage was £307, but this month will be way higher. Just going to leave things as they are until the Spring and review then but also expecting to be more or less level (although latest statement and email suggests I lower payments to £305 - which I can do by simply clicking a button)

 

[Harry Wilson's tackle]

I can’t believe you hadn’t realised this, there’s so much press about being savvy and shopping around and not just renewing with your current provider, if it be insurance, utilities (except water) there are good deals around to be had.

Yes, I have been shopping around with utilities and insurance every year for around 15 years. I got the best deal for my utilities last year. The problem is they then decided to soak me with advanced payments.

 

[Harry Wilson's tackle]

Nobody is getting ripped off in the long term. What is frustrating is that energy companies don't share meter readings or trust the consumer to provide accurate 12-24 month historical consumption which would remove the vast majority of the issues reported by the OP.

The number of times I see internet posts about how much my DD is is ridiculous it just like me saying how much it costs to fill my car with fuel without telling you the cost of the fuel or the size of my fuel tank!

Back in the day (10+ years ago) energy companies made a nice "side hustle" not from OnlyFans but from investing the excess paid by millions of customers.

When interest rates went very low I'm fairly sure they tried their best to get the reserves built up even highter to claw back some of the lost revenue.

For this to be true the energy company needs to be happy to let me get £700 behind in my payments, later this year, without charging me interest, threatening to cut me off, etc. Somehow, I don't imagine this will be the case.

 

[Harry Wilson's tackle]

I'm with Shell Energy for electricity and they reduced my direct debit by £66 temporarily whilst the government payment is being paid. My monthly payment has also gone down.
I can input my own readings (I wouldn't touch a smart meter with a barge pole), and alter the DD amount on their website.

My advice is to ring up, ask for your credit balance to be repaid, and then pay monthly yourself. Cancel your direct debit.
The company has also broken the Direct Debit code by not giving you 10 working days notice of a change in your payment.

Yes. I did that (in the original post)

Apparently, I can adjust my payments on their web site. Luckily, I have almost nothing to do so have plenty of time to deal with this, going forward....

 

[Harry Wilson's tackle]

Not sure it’s a ‘scam’ really…. Personally I’d rather pay the same amount (as I do now) all year round and have credit that’s used over winter, than varying amounts each month.

If I think there to much built up I just withdraw some

Yes, I have, now. I had no idea they would offer this. I had to rant a bit first (which, fortunately, is an easily-conjured part of my skill set).

I recall getting a bit in credit (tens rather than hundres of pounds) for this with another company a few years ago and they absolutely ruled out giving me some of my money back.