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Direct Debit Row Hits British Gas

http://www.thisismoney.co.uk/consumer/bills/article.html?in_article_id=457230&in_page_id=510

Paper edition of Financial Mail On Sunday has a email address inviting people to detail their BG DD Hike grievances. :j
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Comments

  • Cardew
    Cardew Posts: 29,064 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Rampant Recycler
    Just from posts on MSE there certainly seems anecdotal evidence that BG(and other companies) are adopting that practice.

    It was my understanding that there is an Ofgem regulation that prevents companies fixing the DD too high to profit from the interest they would make?? I wonder if the industry insiders on MSE can confirm??

    If ofgem carry out an investigation and work at their normal speed, the practice should stop in a couple of years!!
  • I'm assuming you are Clive, blf? Nice one, about time this disgraceful practice got publicised. OFGEM...workng to protect the public or the energy supplier's interests?

    I'm hoping this has nothing to do with Centrica recently putting out of the begging bowl in the city? Just an embarrasing co-incidence? It would certainly be a very cheap way of raising capital for their acquisition targets. Certainly cheaper than getting it from the Far East (just ask Barclays about that one). With the size of BGs cusome base it wouldn't take a huge over-inflation of DD amounts to raise MASSIVE spare wonga, would it?
    Call me Carmine....

    HAVE YOU SEEN QUENTIN'S CASHBACK CARD??
  • I'm assuming you are Clive, blf? Nice one, about time this disgraceful practice got publicised. OFGEM...workng to protect the public or the energy supplier's interests?

    I'm hoping this has nothing to do with Centrica recently putting out of the begging bowl in the city? Just an embarrasing co-incidence? It would certainly be a very cheap way of raising capital for their acquisition targets. Certainly cheaper than getting it from the Far East (just ask Barclays about that one). With the size of BGs cusome base it wouldn't take a huge over-inflation of DD amounts to raise MASSIVE spare wonga, would it?



    Yip is me. ;) I would have liked to have added more, only had 5 characters left, :cry: Chief Executives do tend to read the comments to such articles. ;)

    Whats interesting is that when people post on here regarding massive increases in Direct Debit payment amounts the vast majority of replies tend to seek to justify why its happening rather than look at apparent fact that the energy companies are merely seeking to use as much of other peoples money for free as they can get away with.

    Lets face it monthly direct debit is only supposed to be a means of budgeting for a forthcoming bill, the user has the responsibility to ensure that the bill can be met when due rather than the energy company using the exercise as an means of using other peoples money for free. Some people are incurring additional costs in time and call charges ( if they dont hav ea freephone number) in addition to the cost of the energy itself due to having to phone these companies up in order to get the monthly payments reduced again. :(

    I was with British Gas for numerous years before I started switching around, in addition i have switched to British Gas in very recent times, my belief is that the energy industry has access to consumers previous consumption history a bit like an open book. ( An industry insider can confirm and reject this belief) so the statement that BG made that it had no knowledge of my previous Gas consumption beggars belief. :angry:
  • Cardew
    Cardew Posts: 29,064 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Rampant Recycler
    my belief is that the energy industry has access to consumers previous consumption history a bit like an open book.

    I would find that very surprising!

    Other than the information you give them in your initial application of course.

    What information do you think they have? On the address? or the account holder?

    In other words, if I(Mr A Hancock) of No1 Railway Cuttings East Cheam switch from NPower to BG, you believe that NPower will provide BG with my account details? Without my permission?

    Do you not think that would come under the terms of Confidentiality and Disclosure?

    I am very willing to bet you any amount of virtual pints that it will not happen.
  • Cardew wrote: »
    I would find that very surprising!

    Other than the information you give them in your initial application of course.

    What information do you think they have? On the address? or the account holder?

    In other words, if I(Mr A Hancock) of No1 Railway Cuttings East Cheam switch from NPower to BG, you believe that NPower will provide BG with my account details? Without my permission?

    Do you not think that would come under the terms of Confidentiality and Disclosure?

    I am very willing to bet you any amount of virtual pints that it will not happen.


    My belief has been formed on the basis that energy meter readings appear to be conducted universally, i.e a meter reader walks up the street and calls on anybody and everybody that is due a meter reading irrespective of which company people are being billed by, someone might say that is not suprising being as the gas/electric is the same irrespective of which company is billing the consumer, if this is the case then meter readings and thus apparent meter consumptions are fed to a central point which is how i then form an opinion that meter readings/consumptions are available to all the energy companies like an open book. Information would be held on a meter number basis. Im happy for an energy insider to counter argument my stated belief as i am not saying that i am correct in my belief, as the saying goes people can believe what they want to believe.:cool:

    During the last 15 months ive switched energy supplier every few months and this is the first occasion that an energy company including BG has told me that they have no record of my previous gas consumption. ;) Even if my belief is incorrect British Gas still have a record of my previous Gas consumption due to the many years that I have previously been a BG customer including during 2007/2008. cheers.gif [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL] [URL="javascript:emoticon(':cheers:')"]cheers.gif[/URL]
  • Cardew
    Cardew Posts: 29,064 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Rampant Recycler
    Playing the Devil’s Advocate for a moment.

    Firstly the companies offer an attractive discount for payment by DD and of course payment by that method is not compulsory.

    Secondly, as many customer’s do, you can pay quarterly in arrears and ‘bank’ the payments you would make by DD, and gain the interest.

    I have tried to take a worse case scenario* and estimate how much interest the companies would gain from me having a credit balance all year.

    Taking nice round figures of annual consumption for gas and electricity of £1,200 with a DD of £100 starting on 01 May. I have assumed £800 for gas and £400 for electric

    The electricity does not build up much of a credit over the summer as consumption does not alter a great deal over the year.

    Gas of course is different and by the end of Sept I calculate I might be as much as £300 in credit, that whittles away to zero.

    The best estimate I can come up with is a mean credit balance of £150 over the year.
    So a loss of £7 to £8 in interest

    The DD discount varies according to company, but would 6% be average? If so that is a saving of £72 against a loss of, say, £8.*

    Let us assume the companies have changed their policy(as looks probable) and are now making money from DD credit balances. If ofgem stop this action, I suspect all that will happen is that the companies will reduce their DD discount.

    * Happy to have those figures disputed!

    Before any howls of protest that I am defending the Utility companies - I am not.
    If they have changed their policy, without notification, they should be brought to task.

    However my gut feeling is that stopping this practice will be something of a pyrrhic victory!

  • I'm assuming you are Clive, blf? Nice one, about time this disgraceful practice got publicised. OFGEM...workng to protect the public or the energy supplier's interests?

    I'm hoping this has nothing to do with Centrica recently putting out of the begging bowl in the city? Just an embarrasing co-incidence? It would certainly be a very cheap way of raising capital for their acquisition targets. Certainly cheaper than getting it from the Far East (just ask Barclays about that one). With the size of BGs cusome base it wouldn't take a huge over-inflation of DD amounts to raise MASSIVE spare wonga, would it?

    I posted the following on this forum 30/01/08. Maybe the UK should support the proposal:-

    "Just been reading there is a proposal in the Dutch Parliament that Energy suppliers should pay interest on customers accounts in credit.

    This seems a good way of ensuring energy companies don't exploit customers by taking excessive direct debits.

    If it is taken up in Holland then the EU may roll it out."
  • Cardew wrote: »
    Playing the Devil’s Advocate for a moment.

    Firstly the companies offer an attractive discount for payment by DD and of course payment by that method is not compulsory.

    Direct Debit monthly payment discounts are supposed to reflect apparent fact that paying by this method saves the companies a fortune in billing, sending paper reminders and further payment reminders by post in addition to the fact that a large amount of the payments are received in advance automatically not for the companies concerned to use direct debit customers as an interest free loan facility. [URL="javascript:emoticon(':nono:')"]nonono.gif[/URL] [URL="javascript:emoticon(':nono:')"]nonono.gif[/URL] [URL="javascript:emoticon(':nono:')"]nonono.gif[/URL]

    Mr Cardew, You are good with the quick answers. :T Can you give one explanation and/or justification why somebody like me who uses virtually no Gas, who is happy to pay by direct debit + paperless billing for both electricity and gas should have 69.00 a month monthly Gas payments imposed for at least 4 months when I have previously been a BG customer, previous monthly payments have been agreed in advance based on my previous consumption of virtually no gas used. :huh: ( lets remember my Gas DD discount will be whatever percentage of "virtual" nothing.)

    Mr Cardew, Why do you believe that BG have stated that they have not got a record of my previous Gas consumption as a reason for imposing a monthly DD Gas payment of 69.00 on me when I have previously been a BG customer. :huh:
  • the supplier will not know you usage informtion, apart from the informtion you provide at the time of appliction. they will ony receve meter readings for you supply when they are your supplier.
    LBM:j -16/06/04
    Debt at highest=£15,526:mad:
    Now=£1500:T :T :T
  • Cardew
    Cardew Posts: 29,064 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Rampant Recycler
    Direct Debit monthly payment discounts are supposed to reflect apparent fact that paying by this method saves the companies a fortune in billing, sending paper reminders and further payment reminders by post in addition to the fact that a large amount of the payments are received in advance automatically not for the companies concerned to use direct debit customers as an interest free loan facility. nonono.gif nonono.gif nonono.gif

    Mr Cardew, You are good with the quick answers. :T Can you give one explanation and/or justification why somebody like me who uses virtually no Gas, who is happy to pay by direct debit + paperless billing for both electricity and gas should have 69.00 a month monthly Gas payments imposed for at least 4 months when I have previously been a BG customer, previous monthly payments have been agreed in advance based on my previous consumption of virtually no gas used. :huh: ( lets remember my Gas DD discount will be whatever percentage of "virtual" nothing.)

    Mr Cardew, Why do you believe that BG have stated that they have not got a record of my previous Gas consumption as a reason for imposing a monthly DD Gas payment of 69.00 on me when I have previously been a BG customer. :huh:

    Mr bristolleedsfan,
    You posted a link to an article and, as I understand it, this is a general thread about the(changed?) policy on DD payments, not the specifics of your account.

    I really have no idea why BG charged you an unjustifiably high DD - how would I? It very well might be them trying to swindle you, or a mistake or whatever.

    Likewise I have no idea if BG have a record of your previous history, I suspect they have somewhere, but their records are so appalling that even if they wanted to find it I doubt if they could. Since the change to the new computer system(which still is not fully functional apparently) they cannot find previous bills for existing customers, let alone dormant accounts.

    Do I think they tried to find your record? – no I don’t! I suspect that you are treated as any of the millions of new customers they gain(and lose!).

    Again IMO the issue is not your account. I was answering the general point you made; namely that you believethat the energy industry has access to consumers previous consumption history a bit like an open book.” I don’t believe that to be the case.

    I have made it abundantly clear that they should not raise DDs more than is justified, to raise revenue from the interest, and in fact I thought such practice was forbidden.

    Again as I stated above that there is plenty of anecdotal evidence that BG have changed their policy.

    On the other hand there was a thread a few weeks ago where I posted that my DD was reduced considerably by BG when there was no justification for a decrease and someone else posted that exactly the same had happened. So in our cases, exactly the opposite happened. see:
    http://forums.moneysavingexpert.com/showthread.html?t=1251355&highlight=algorithm

    Now people don't normally come on MSE(or to other media) and complain like mad that they are paying less; and such cases less likely to come to our notice. So do the number of unjustified increases outweigh the unjustified decreases - I suspect they do and hopefully Ofgem will investigate.

    C0ck up or conspiracy? probably the latter!
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