Energy Companies Allegedly Misuseing Direct Debit Scheme

wowsavings

From what I have read, it is not about the energy companies making money. At the end of the day, if a I am in credit, it is my money, but it is in the energy company's account. The accusation is that energy companies are increasing Direct Debits to increase cash flow, not profits.

If I am paying more for my Direct Debit than the cost of the gas and electricity that I am using, why should it be in their account and not mine?

Looking at the quotes that are in the previous post, maybe across a supplier as a whole, customer debt may well be in a debit position. However, there will be some customers who are in credit and facing increases to Direct Debits. This is maybe therefore a problem that only certain individuals face rather than a supplier wide problem.

For those that have had an increase in their Direct Debits and don't think they are fair, the following site has an article which tells you how to challenge it with your supplier, http://www.switchwise.com/energy/energy_direct_debit_concerns.htm

DirectDebacle

Switched both fuels to Scottish Power in early August on fixed price and before the increases. Knowing my avge kWh per annum for the previous 10 years I arranged DD at an amount to give £0.00 balance August 2009 based on overall avge plus a bit extra.

Received letter announcing increase in DD from £114 to £137. I wasn't pleased.

After getting past front line customer services, who have limited authority to alter DD and through to Customer Care section spoke to someone who knew their stuff. They crunched my numbers and came up with £117.00. So I agreed. To me that is how DD should be, even 12 monthly payments so you are quits at start of new payment year. Fixed price should mean it won't alter unless usage alters dramatically. However they review DD every 3 months so due a review in Feb. Can't help thinking will have to go through the same rigmarole again but at least they listen and was given direct no. to Customer Care and name and extension of the person I spoke to.

MarkyMarkD

Good to hear that.

The problem with quarterly reviews is that if your pattern of usage during the year differs from the average, they will probably think you are under-paying when you are not. (Or over, of course).

mardatha

But I cant understand why anybody would pay over the odds jsut to have a teeny wee saving ! Why not work out your monthly useage and then put that DD into a savings account just for that bill ?
A few months ago I read on here that it was cheaper to pay by DD, so phoned them, the lady at Scottish Power quoted me £45 a month DD. We pay cash quarterly at present and it works out at £40 a month. So I told her forget it. No matter how you dress it up or crunch numbers , that is costing me MORE not less !

Cardew

mardatha wrote: »

But I cant understand why anybody would pay over the odds jsut to have a teeny wee saving ! Why not work out your monthly useage and then put that DD into a savings account just for that bill ?
A few months ago I read on here that it was cheaper to pay by DD, so phoned them, the lady at Scottish Power quoted me £45 a month DD. We pay cash quarterly at present and it works out at £40 a month. So I told her forget it. No matter how you dress it up or crunch numbers , that is costing me MORE not less !

That simply is not the situation for most people as the saving for DD is way way more than you would get from saving and paying quarterly.

According to uswitch the average DD discount for dual fuel is 7%.

So the average bill in UK is £1200pa - £100 a month by DD.

So with DD you get an annual discount of £84.

Paying £100 into a saving account each month and paying your bill quarterly means your average balance during the year is £150. So at 6% you will get £9 interest(and you will be lucky to get 6% after tax - 4% and thus £6 is more likely) plus the fuss and bother of paying bills quarterly.

Your £45 DD against paying £40 is meaningless - all that matters is what you pay over the year and with a DD it will be less.

moonrakerz

I moved supplier back in April, a DD of £65 was agreed. My last statement showed me to be £26 in credit. However, being of "sound mind, etc" I realised that when I started running the C/H over the winter that by next April/May I would be hugely in debit. This would then mean a huge increase in my DD to clear the debt and build up a reasonable credit for next winter. (Then I could have posted an indignant message on this site saying that my DD has been tripled !!)

To avoid this I thought that increasing my DD to £90 a month was a reasonable move, I went to do this on line and my supplier suggested £94 - I was happy with that, so went for it. I may have a debit even then but it won't be anywhere near what it would have been if I had just sat there, "fat, dumb & happy".

Sorry to say this - but there are just far too many people who just don't have a clue about energy prices and even the basics such as you use more gas in the winter !
When they see a stupid Daily Wail headline about the energy companies they and their equally stupid MPs all start bleating !

How much does a kWh of electricity or gas cost you ? What is your annual consumption ?
Be honest - can you answer that off the top of your head (+/-10%)? If you can't, sit down and study your last four bills - then you might have something to bleat about from a position of some understanding !

BallandChain

I wonder if the energy companies will be contacting their customers to say their monthly direct debit payments will be reduced once prices come down!

JCB2020

I have done some calculations based on my current tarrif for Gas to see what the difference would be between paying monthly DD and a quarterly Debit card payment.

Recalculating each quarter seperatly, due to split rate on usage.

Supprised that the difference in favour of DD is 23% a year.

As far as I am concerned its a no brainer, despite being in credit after each bill for the last 12 months.

bristolleedsfan

BallandChain wrote: »

I wonder if the energy companies will be contacting their customers to say their monthly direct debit payments will be reduced once prices come down!

Well when they launch new cheaper variable rate tariffs they mostly or wholly neither inform the customer of the new lower rate tariff available nore do they inform the customer that their direct debit payment could be reduced by moving to the newly launched cheaper rate tariff.

mardatha

It's not meaningless if I would be paying more each month AND going through all this hassle that I'm reading about !
I read the meter every week; work out how much I've used; put the money aside; never accept an estimated bill; pay it cash when I get it.
What's wrong with that ? Sorted. With no fuss, no hassle, no worry. The amount I'm supposed to be saving by using DD is not worth this nonsense.