BG direct debit increase when in credit!

1carminestocky

http://www.which.co.uk/news/2008/09/energy-suppliers-worst-for-customer-satisfaction-157334.jsp


Suppliers could also be setting direct debits too high. More than one in five gas and one in six electricity customers who were in credit said that the credit on their account was more than £100. Which? estimates that direct debit customers could have overpaid by £660m in total.

Which? researcher, James Tallack, said: ‘It was surprising to find so many customers in credit, as the survey took place at the end of the colder, darker half of the year when energy use is higher and people are more likely to have run up a debt with their supplier.’

pashley

I've just managed to get the latest policy from BG regarding credit balances. It seems that an automatic refund of the balance should occur if the amount exceeds £200 and it is reviewed every 6 months. The last version of this policy that I could find was set at £80 reviewed every 3 months. So it seems that there is a conscious decision to raise this trigger point substantially. And why does the DD arrangement need to be cancelled and reinstated to make this work. I had a balance of £150 and managed to get it reduced to £50.

1carminestocky

pashley wrote: »

I've just managed to get the latest policy from BG regarding credit balances. It seems that an automatic refund of the balance should occur if the amount exceeds £200 and it is reviewed every 6 months. The last version of this policy that I could find was set at £80 reviewed every 3 months. So it seems that there is a conscious decision to raise this trigger point substantially. And why does the DD arrangement need to be cancelled and reinstated to make this work. I had a balance of £150 and managed to get it reduced to £50.

If true, that is frankly ridiculous! :eek:

selbmag

I would try ringing BG and saying how much a month you will be paying via DDB.

This should of course cover 12 months usage leavign your balance around zero at the end.

They may say "well it has to be £xx". to which I would reply "I only authorise you to take £xx from my account."

I would then write to my bank (or drop a letter into the branch). Saying you authorise BG to only take £x per month from your account.

Then if the DDB amount taken exceeds this reclaim the excess amount under the DDB guarantee. Reclaim the excess every month until they get the message.

Alternatively switch providers.

MarkyMarkD

A £200 threshold, if true, isn't "frankly ridiculous".

A quite normal level of gas consumption is around £600 per year, or £50 a month. Our consumption is around 4 times as much in the winter months as in the summer. So (and this is simplifying things a lot) we use around £20 a month in the summer months and £80 a month in the winter months - total = (6 x £20 + 6 x £80) = £600.

If we start our monthly payment scheme in the spring, we'll pay £50 a month for the first six months = £300. And we'll only use 6 x £20 = £120. So our account will be £180 in credit.

But we should no way get a refund of that £180. That £180 is the amount needed to make sure that we end the full year with a £Nil balance.

backfoot

MarkyMarkD wrote: »

A £200 threshold, if true, isn't "frankly ridiculous".

I think posters are actually relating the position after a full annual cycle.I have quoted the £110 balance on an annual bill of around £360 from an e mail received from BG in the last few days, so £200 is not a set policy.

It's a nonsense and flawed policy. Our credit balance is £98 so if I pay an additional £13 I will get a full refund down to nil.If I ask for £98 back my DD's cover the next twelve months they refuse.

It's my money damnit.

MarkyMarkD

The position after a full annual cycle is also distorted if there has been a price increase.

If, using the figures in my example, you've been paying £50 a month for 6 months and then there is a 30% price increase, your fuel cost for the next 6 months is going to be not £50 increased by 30% (i.e. £15 a month more), but £80 increased by 30% which is £104 - £24 a month more.

Is it surprising that people look at a 30% increase and say - why are my DD payments going up by 48%? But that's the amount required, to get to zero at the end of the annual payment plan.

This is why, at a six-monthly review point, people are amazed to be asked for more money when they are in credit. Again, using my example figures, the customer would be £180 in credit, and yet be asked - entirely correctly - for an increase in payments of £24 a month.

If you don't believe my figures:

- consumption is 6 months @ £20 followed by 6 months @ £104 i.e. £744;
- payments in the first 6 months @ £50 = £300
- credit balance at the half-way point = £300 - £120 = £180
- payments in the second 6 months @ £74 = £444
= total payments over the year of £744 = total consumption.


As I said above, I can see why people get confused. But I can also see why:

- monthly DD payments increase by more than the percentage of any increase in the unit costs (because there is a catch-up involved); and
- monthly DD payments increase even when accounts are in credit - at any time other than the end of the plan year.

Maybe people will stop alleging it's all a conspiracy by the energy suppliers. :rolleyes:

Cardew

selbmag wrote: »

1. I would try ringing BG and saying how much a month you will be paying via DDB.

This should of course cover 12 months usage leavign your balance around zero at the end.

They may say "well it has to be £xx". to which I would reply "I only authorise you to take £xx from my account."

2. I would then write to my bank (or drop a letter into the branch). Saying you authorise BG to only take £x per month from your account.

Then if the DDB amount taken exceeds this reclaim the excess amount under the DDB guarantee. Reclaim the excess every month until they get the message.

3. Alternatively switch providers.

1. This is exactly what should happen - which is why it is called a 'Direct Debit Agreement'
If the company and yourself cannot agree, then you do not have an agreement and the company will not let you pay by DD.

2. That is simply not an option under the bank's Direct Debit agreement scheme. It is a DD, not a Standing Order.

With a variable DD agreement you sign a mandate allowing your bank to pay such amounts as the Utility company(any utility company) demand. The only stipulation is they must notify you in advance of any increase. You can the go back to step 1 if you don't agree with the level of increase.

The Bank's DD guarantee comes into force if the Utility company does not notify you of an increase.

3. Obviously an option, but all Utility companies use the same Bank scheme for variable DD payments, so 'out of frying pan and into fire' comes to mind.

backfoot

MarkyMarkD wrote: »

The position after a full annual cycle is also distorted if there has been a price increase.

So if there is a price decrease would you still think it was possible for DD to go up? It did for us by 50% on gas and 66% on electricity despite being in credit on both accounts.

That looks conspirital to me.:eek:

selbmag

Since in step 1 you only agreed to them taking what you said if they take more then they are in breach of what you allowed them to take.

If they do not agree with what you are saying then it is up to tem to cancel the agreement.

As for 3 I use AEG who clearly show the calculations on each statement on how thy work out your DDB. No strange increases for no reason. Never had this kind of problem with them. I am sure other providers also provide clear calculations for the monthly DDB.