Check Your Revised Monthly Payments!

karensayhi

Hello All

Just got through our quarterly leccy bill from npower today, which informed us that, even through we have a £20 credit balance on our account, they were looking to increase out monthly payment from £62 to £141!!!

The revised account was accompanied by all sorts of 'helpful' figures, including a calculation which set out how they had come to the revised figure. After a bit of chin stroking what seemed to the problem was that they estimated our usage was going to more than quadruple!!!

I got on the phone straight away and was told the problem was that the bill was based on old estimates. So then I read the meter..and the actual usage to date was higher than estimated - so things were not looking good. I held my breath to hear what the actual monthly payment was going to be...and I was told it was only going to increase by the princely sum of £3.

What seems to he happening is that, in the light of news coverage of people getting huge bills when actuals far exceed estimates, at least this power company is going in the completely opposite direction and, literally, making up a huge figure to base its bills on. The lady on the phone told me that this is more a less deliberate tactic, and that it is really designed to get people to call in to give their meter reading, at which point the real, and far more sensible payment, is calculated.

I'm sure most of you would do the same as I did, and get on the phone immediately. But I'm a little concerned that many people would be blinded by the science in npower's 'helpful' calcalations and simply assume they were right.

(and yes, I know, it should all come out in the wash when someone gets round to reading the meter, but its still a huge hike to bear in the meantime)

Premier_2

You should be in quite a bit of credit this time of the year to balance the heavy consumption over the winter.

They may have only agreed to a £3 increase, but unless you cut back on energy use significantly over what you would normally use in winter, expect a debt to have accrued meaning they will increase your DD payments later.

It could be a cynical viewpoint, but suppliers know they can prevent you from switching to a competitor if you have an outstanding debt.

Magentasue

If you're going to maintain low payments, you need to keep your consumption in line. Read your meter every month, work out how much you will need to pay and, if it's more than your DD, put the difference into a savings account ready for judgement day.

Cardew

karensayhi wrote: »

What seems to he happening is that, in the light of news coverage of people getting huge bills when actuals far exceed estimates, at least this power company is going in the completely opposite direction and, literally, making up a huge figure to base its bills on. The lady on the phone told me that this is more a less deliberate tactic, and that it is really designed to get people to call in to give their meter reading, at which point the real, and far more sensible payment, is calculated.

I'm sure most of you would do the same as I did, and get on the phone immediately. But I'm a little concerned that many people would be blinded by the science in npower's 'helpful' calcalations and simply assume they were right.

(and yes, I know, it should all come out in the wash when someone gets round to reading the meter, but its still a huge hike to bear in the meantime)

Excellent post, and I think your theory is plausible.

If you read through this forum there are:

1. Hundreds of posts complaining bitterly that it is the Utility company's fault that they have run up a large credit balance because their DD was too high(and are getting the interest on their hard earned cash)

2. Hundreds of posts complaining bitterly that it is the Utility company's fault that they have run up a large debit balance because their DD was too low(the interest they themselves have gained is not mentioned!!)

The companies are in a lose/lose situation.

Obviously the solution is to correct any estimated meter reading and keep an eye on your Utility accounts.

brysiewysie

karensayhi wrote: »

What seems to he happening is that, in the light of news coverage of people getting huge bills when actuals far exceed estimates, at least this power company is going in the completely opposite direction and, literally, making up a huge figure to base its bills on. The lady on the phone told me that this is more a less deliberate tactic, and that it is really designed to get people to call in to give their meter reading, at which point the real, and far more sensible payment, is calculated

Although I can't speak for Npower I have seen some billing departments do this really as a last resort on some Eon accounts (I've only ever seen a handful in total) but only because the customer has failed to respond to letter, phone calls, estimated bills etc for long periods of time.

karensayhi

Not sure if its a last resort in this case, as we've only missed 2 quarters of meter readings.

Some good points here about how our balance should look at this point in time..however its probably worth noting that we normally flex our payments throughout the year, rather than build up a surplus.

littletommytucker

Karen are you in an ell electric property? If so that £20 credit and and £3 increase will be no where near enough to cover you winter bills. Take a look at how much electric you were using last winter.. and add the 25% price increase onto to see what you should be paying. x

Incisor

Cardew wrote: »

Excellent post, and I think your theory is plausible.

If you read through this forum there are:

1. Hundreds of posts complaining bitterly that it is the Utility company's fault that they have run up a large credit balance because their DD was too high(and are getting the interest on their hard earned cash)

2. Hundreds of posts complaining bitterly that it is the Utility company's fault that they have run up a large debit balance because their DD was too low(the interest they themselves have gained is not mentioned!!)

The companies are in a lose/lose situation.

Obviously the solution is to correct any estimated meter reading and keep an eye on your Utility accounts.

An alternative theory is that the utilities are swelling their bank balances by bleeding dry the accounts of their customers. Of course if a utility has done that and then goes bust, the customers can expect to say goodbye to the money.

Either way, they ought to publish the exact method for calculating monthly payments.

chairman_miaow

I agree ! They all seem to be increasing the monthly direct debits by completely disproportionate amounts...

KimYeovil

Firstly, I agree that they mostly seem to overinflate the dd's.

But remember, at the beginning of November you should be a lot more than one month in credit to avoid an (apparently) disproportionate increase. Consider a mild year with only three winter months. Over a winter month you easily use four or five times the fuel for a summer month. So to break even by next November, you have to pay 9 summer months plus (3 winter months at 4 x summer months consumption.) That's a total of 21 months at last summer's payment over the next year. If you've had a 30% increase in the cost recently, that'll be an extra 21x30% - or more than 6 months. That makes a total of 27 months. So to break even you need to pay 27 times what you paid one month last summer. IE, if you are only a month or so in credit then it is perfectly reasonable to double your direct debit.

Of course, if you have the heating on all year round this is irrelevant and the suggestion is incorrect. I'm just pointing out that for the most normal pattern of consumption, a doubling of the direct debit when you are only slightly in credit is not as unreasonable as it may at first seem.

Cardew

KimYeovil wrote: »

Firstly, I agree that they mostly seem to overinflate the dd's.

I wonder if this is a change in policy on the part of all the Utility companies.

Certainly a couple of years ago the Regulator stated that the companies were owed far more money than they owed. i.e. debit balances out-weighed credit balances.

The companies got some 'flak' for allowing this situation to occur.

That is borne out by the many complaints on MSE of debit balances of £hundreds/thousands.

Much of this is/was caused by setting the initial DD far too low to entice people to switch supplier.

Stand by for a whole new raft of complaints about them making money from the interest on the over-payments.