EOn DD Hike

DandyDon_2

Just some advice please, I have just received (like many it seems) a note to say my DD is going up, now i have no doubt behind the logic in why they want to, my question centres around a statement made by the Eon employee who i was talking to.

I said why cant i keep DD the same and if i go into red then i can pay off on one off payment, his response was that I "had no choice, in order to receive the benefits of DD i HAD to accept the DD increase." :eek: Is this correct or was he talking nonsense?

Cheers

DandyDon

brysiewysie

Eon benefit (as others do) by getting regular cash flow and don't have to chase debt on a correctly set up DD. You benefit because you get a discount off your full bill by paying by mthly DD. You can't expect to get the best of both worlds and expect Eon to still give you a discount can you?

Where would you draw the line about what was a suiatable balance between a DD sum and accruing debt? Could you set up a DD for £1, get a full discount on your bill and then pay the balance (or not)?

Magentasue

He is correct. The idea of DD payments is you divide your annual bill by 12. What you want, is to pay by Standing Order and settle quarterly. This is probably possible but you won't get the DD discount.

WelshGandalf

Earlier this year after the first price rises EON put my DD up from £50 to £65 - I complained as I had worked out this was much more than the value of my consumption - so they put it down to £55 again (which still covered my consumption and a bit more, towards winter)

Then as you did I had a letter saying they were putting it up to.... £83! OK so it does have to go up due to the later price rise - but £83 will more than cover my winter consumption, and one of the points of monthly DD is to over-pay in the summer and that over-payment covers the extra consumption in the winter.

Rather than writing to them again, I am switching supplier instead this time! I'm saving about £110 a year by moving to nPower.

So, I suggest you either 1) Contact them again and ask for £5 or £10 off your DD, or 2) move supplier! If you do 1) whilst threatening 2) that will increase your chances

Premier_2

I think with Eon, you generally get a 6% discount for paying monthly by DD

If you pay quarterly by DD (reflecting the actual billed/consumed amount), the discount is 3%

However, I think some tariffs mandate that you pay monthly by DD (if you don't, they'll switch you to a tariff that allows payment on receipt of bill) so be careful before making any decisions.

KimYeovil

WelshGandalf wrote: »

Rather than writing to them again, I am switching supplier instead this time! I'm […] moving to nPower.

We await your future posts sent from the fire nostalgically reminiscing about your days in the frying pan.

Incisor

DandyDon wrote: »

Just some advice please, I have just received (like many it seems) a note to say my DD is going up, now i have no doubt behind the logic in why they want to, my question centres around a statement made by the Eon employee who i was talking to.

I said why cant i keep DD the same and if i go into red then i can pay off on one off payment, his response was that I "had no choice, in order to receive the benefits of DD i HAD to accept the DD increase." :eek: Is this correct or was he talking nonsense?

I would say he is talking nonsense, because presumably he works in a call centre. It is not his own personal nonsense, it is the nonsense his managers are employed to propagate.

Your best line of attack is to ask for a fully worked calculation, complete with assumptions which justifies their DD demand. Really, these utilities should be transparent and publish the exact method of calculating a DD.

brysiewysie

WelshGandalf wrote: »

Earlier this year after the first price rises EON put my DD up from £50 to £65 - I complained as I had worked out this was much more than the value of my consumption - so they put it down to £55 again (which still covered my consumption and a bit more, towards winter)

Then as you did I had a letter saying they were putting it up to.... £83!

Maybe you should have accepted the original increase then?

As mentioned by many others take care if you're assuming the cost of the DD is the cost of your usage. It's much better to compare your consumption with the unit prices charged (and discounts given).

WelshGandalf

No I shouldn't have accepted the initial rise. Apart from the first few months (when I was paying extra for the consumption prior to my first payment) I have never been in the position of owing E.ON money. If the DD was set to average the payments out across the year...

1) I should owe them money at some point
2) The DD over winter should cover a bit less than the cost of consumption

I've got my consumption figures from last year - so I know 2 is not true. Trust me also I know to compare the unit rates rather than the DD, this doesn't stop the DD being set unreasonably high in order to benefit the supplier. (wouldn't suprise me if they've tweaked their algorithms in order to make this happen, because of the credit crunch)

The killer thing for me with E.ON's tariff is that their primary rate for gas has gone up about 50% in the year I've been with them :eek: Since my flat is empty during the day (doesn't require heating) and we have an electric oven not a gas one... the vast majority of my usage is in primary units.

I'm well aware that I may be jumping from the frying pan into the fire, and I've been resisting it but now the annual saving runs into 3 figures, I've made the jump.

brysiewysie

WelshGandalf wrote: »

........... If the DD was set to average the payments out across the year...

1) I should owe them money at some point
2) The DD over winter should cover a bit less than the cost of consumption ......

No, Eons DD scheme works to get to a zero balance at your spring review (April, May or June bill). Therefore if it works the way Eon want you won't have debt on your account at any stage.

Incisor

brysiewysie wrote: »

No, Eons DD scheme works to get to a zero balance at your spring review (April, May or June bill). Therefore if it works the way Eon want you won't have debt on your account at any stage.

Actually, in my case they are arguing to get a zero balance at the spring review nearly a month before the bill - so that the monthly payment I make between the review and the bill is ignored in getting the account into balance.