Energy Companies Allegedly Misuseing Direct Debit Scheme

Cardew

Incisor wrote: »

Thanks


It costs the average consumer £300 to keep the DD schemes going the way they are now. Lost interest is a totally unfeeling way of looking at the fact that a poor household has to find £300 which they cannot spend. And they are permanently deprived of it for all of the time that they take supply. And I who does have savings account still feel that the supplier has £300 of mine which I have to wrok to earn and I never get back. In fact if a utility goes bust I risk losing it and having to find it for another supplier.

I don't understand how you reach a figure of £300 of which customers are "permanantly deprived".

Are you saying that even with your "extreme" scenario of 6 payments of £200 followed by 6 payments of £zero, that a customer will always be £300 in credit?

Surely he is only going to pay £1,200pa the same as the customer paying 12 x £100?

DirectDebacle

Cardew wrote: »

Surely we should identify if the problem exists, which companies are guilty, and quantify the effect.

However it has built up to yet another full frontal attack on all utility companies on every aspect of their performance, full of emotive words. An individual case is absolute proof for some posters that a policy change has taken case.

The thread asked the question, Are the utility companies misusing direct debits?

It would seem the answer is yes and there are different problems for customers of different companies. A common theme is the lack of information given to the customer. This leads some consumers to think that the companies have something to hide and deepens the suspicion that they are being duped.

Policies of requiring a variable DD as part of a contract only serve to add to a customers suspicion that the DD scheme can and is abused. A Standing Order is just as an efficient means of payment as a DD but is not an acceptable option to the companies for their best value tarrifs. We know why.

A policy change, or suspicion of one, is only a single example. Strip out the complaints that can be answered by customers not taking into account a recent price increase and there are still many posters complaining of DD abuse. Cardew had his DD inexplicably decreased. This is possibly worse than an increase as it leaves a customer vulnerable to rapidly accumulating a large debt. Fortunately Cardew is alert and spotted this and took remedial action. Not all customers are this good at monitoring their utility bills or DD payments.

Naturally a discussion such as this will spill over to other aspects of a companies performance. If you dispute a DD then you have to contact the company and then the customer service experience will become part of the debate etc.

In general for domestic customers the utility companies offer poor customer service especially when they only have to supply two basic products.
If you took the best practice from each of the Big Six and used those practices to form one company you would end up with one entity that could at best be described as average.

Since privatisation, there has been little improvement in customer care. Why should there be? We have no-where else to obtain our energy.

1carminestocky

The things they say, eh? Phil Bentley, BG Head Honcho, interviewed by the Mail on Sunday (in an article in which Govt. Energy Minister Mike O'Brien claimed to have also been a victim of the direct debit con):

'When it comes to direct debits we try to be transaprent and fair'


:rotfl:

backfoot

Cardew wrote: »

Apologies - my post was over the top.

I was irked by being called a 'fan of BG' - so that devalues any input I might make - and that set off my reaction!!

It seems to me that of late there is little rational and reasoned debate in this forum, and any post that isn't total and utter condemnation of the Utility companies is belittled and the poster accused of a vested interest. A good example is your expression "Utility lovers" - which hardly adds to reasoned debate.

Take this thread.

Surely we should identify if the problem exists, which companies are guilty, and quantify the effect.

However it has built up to yet another full frontal attack on all utility companies on every aspect of their performance, full of emotive words. An individual case is absolute proof for some posters that a policy change has taken case.

Frankly it is almost like a lynch mob mentality at times.

Thank you for the apology. I also didn't feel the personal attack on me was warranted.

Yet the remainder of your post, with respect, goes on to bemoan the treatment of the Utilities as the good boys been unfairly bashed by the mob! .I think you have become oversensitised to reading the horror stories and hang on to every phrase and word as guardian of fair play.

The facts are that on this case,there has been a groundswell of ordinary UK Customers affected, not for the first time, by something untoward from the energy companies.

Much of the evidence,seems to support it. The thread is there for worried people to add their experience and yes to establish if there may be a systemic problem.

Inevitably,people become angry, especially if on so many occasions they face an uphill struggle to get any meaningful communication back to sort out or understand the problem.Contributors are simply expresing their frustration.

I seem to remember,you were a supporting champion of DirectDebacle in his fantastic struggle with NPower.If we had believed their rhetoric, we would all of gone away and they wouldn't have been exposed for what they really are.I don't see any difference on this topic.

Of course,if it is your company or you are an ex employee,or you are Consultant to the Industry,then some of this criticism inevitably gets your goat, because it only represents the bad side of what are often decent organisations with decent ordinary workers.

The trouble with constantly diving in to shore up that balance is that it just !!!!es off the aggrieved even further, when they know they have a legitimate query. You actually inflame the debate even more.

I liken it a bit to being a member a Supporters Club for one team, and then, just to exercise your freedom of expression,you as a follower of a different team, come along to a meeting and talk about your team and interests.It's not in the the right place or context.

You do have to wonder what your motivation really is to do this? Emotional attachment,pension rights, loyalty? It is obviously frustrating to you so why bother so much?

:beer:

DirectDebacle

I wonder if this would work.

Ofgem order that all credit meter customers can no longer be forced to enter into a DD scheme as part of a contract.

Alternative forward payment schemes must be made available. e.g. S/O.

A choice of quarterly or monthly billing in arrears.
Meters must be read by the company at least twice a year for all customers and bills produced.

A standard bill format common to all companies containing the necessary information required to accurately check a bill and full details of adjustments to payment plans.

I feel the point has been reached where the basic requirement of trust between company/customer is now so badly broken that it is beyond repair. I do not attempt to apportion blame. Both sides have contributed to the situation.

Energy is far too an important resource to be left entirely in the hands of private companies. It says something when the biggest player had to bring in 300 staff on overtime to man emergency phone lines to deal with complaints about DD !

You might expect this if a major supply pipe had fractured and left millions of housholds without gas.

There should be an in depth Govt. enquiry into this industry (not conducted by Ofgem) with the aim of ensuring that companies and customers are treated fairly and that future energy requirements are catered for by proper planning and investment. Shareholders dividends should not come into the equation. If the companies don't like it then they go elsewhere and the void will be filled by companies that do care or by nationalisation. A bit like the choice we now have if we don't like DD. There, eventually got it back to the topic of this thread.;)

backfoot

100% agree DD.:T

Cardew

backfoot wrote: »

I liken it a bit to being a member a Supporters Club for one team, and then, just to exercise your freedom of expression,you as a follower of a different team, come along to a meeting and talk about your team and interests.It's not in the the right place or context.


:beer:[/quote

Nice analogy.

Sums up my reservations about this forum perfectly!

Joyful

The Managing director of British Gas was recently on TV. He advised he would check out the concerns of customers who had complained about their Direct Debit reassessments and respond to them. He has given me permission to copy the letter he has sent to them all. Hopefully this will put to rest how British Gas calculate their DD's.



26 November 2008


Dear customer,

Let me start by explaining how the direct debt (DD) system works. Most of us burn 4 times as much gas in winter, than summer, and the DD process is designed to spread payments evenly throughout the year for customers who want to avoid a large winter bill.

The way it’s designed is that the customer starts the winter in credit, but as consumption increases during winter, whilst payments stay flat, our customers end the winter with a larger debit position which is then recovered over summer when your consumption falls. This is the way it has always been – and that’s why DD remains our most popular means of payment with over 6 million accounts. To add some facts – the average British Gas customer starts the winter with a £6.50 credit and ends it with a £70 debit to be recovered over the summer. Customers therefore benefit from this payment arrangement.

The problem you’ve highlighted is that the DD amount has gone up, even though you are in credit, and I agree this isn’t always easy to understand. Let me try to explain: the whole of the energy industry has seen higher fuel costs and two price rises in 2008. These are, I’m afraid hitting your bill now. I’ve been through your calculations with my team, and the maths looks correct such that I expect that by next summer it will have evened out and you’ll have paid for the energy you’ve used. We can, of course, reduce your monthly DD, but if it were to be less, then you would end the summer in debt, which is generally not where most of our customers want to be. However, our 7,000 UK-based front-line colleagues are trained to provide help and if you would like us to reduce the increase, we can do so, provided you recognise that it may not cover your usage. Call us on freephone 0800 048 0101 if this will help at this time.

Finally, as the biggest UK buyer of gas from the world markets, I can tell you that there is nothing more we would like to see than lower prices for our customers. We very much recognise how difficult it is for households across Britain to manage in today's economic environment. British Gas led the market with two price decreases in 2007 and hopefully we can do so again in spring 2009.

I do welcome feedback from our customers, both positive and negative, as that’s how I learn what’s working well and what needs fixing. That’s one reason why complaints have fallen 90% since I joined British Gas last year. We’re also working hard to do all we can to help our customers cope with their energy bills at this difficult time. And that’s why British Gas has committed to spend £1,000 million over the next three years helping our customer reduce their bills, through energy savings – you can start by getting information from our web-site at britishgas.co.uk.

Thank you again for raising your concern and for your custom with British Gas, which is very much appreciated.

Yours sincerely




Phil Bentley
Managing Director, British Gas

1carminestocky

The Managing director of British Gas was recently on TV. He advised he would check out the concerns of customers who had complained about their Direct Debit reassessments and respond to them. He has given me permission to copy the letter he has sent to them all. Hopefully this will put to rest how British Gas calculate their DD's.

Crikey, joyful, exactly high far up the food chain are you at BG Towers? :eek: I'm sort of glad you've re-inforced my view that the energy companies view this forum as very important. Thanks for the post.


Ps No mention of what happens when prices descrease next year (cos they will)..

Cardew

Incisor wrote: »

No, you sticking up a misinterpretation to shoot down. The scenario is 6 months of consumption at £200/month and 6 months of consumption at £0/month, but paid by even DD at £100/month. As explained in my post #144

If the account is put into balance at the end of the 6 months of consumption, then the account will be £600 in credit by the end of the 6 months of nil consumption. The account will always be in credit, and against a Fair DD, where the debit and credit are spread equally, the customer must pay £300 towards the bank balance of the supplier.

You are an intelligent man, trying to confuse here. Yes of course the same £1200 may be paid for the year's energy, but I have already addressed the Quarterly Bill scenario, which shows that the customer gets a small credit from the supplier, the Fair DD, with review dates mid summer and mid winter is no net credit in either direction and the Unfair DD where the customer is providing £300 to the Suppliers balance sheet.

I am indeed not trying to confuse.

I hadn't appreciated the "6 months of nil consumption". point.(yes I appreciate for illustrative purposes)

Lost interest is apparently of no importance on a Money Saving Website!

A large Direct Debit Discount apparently can be disregarded!

What is important and the wicked aspect of DD manipulation,(still all companies found guilty?) is a cash flow problem.

We will have to agree to disagree.