npower increasing direct debit

Bogof_Babe

Just had the quarterly bill from npower, from an actual meter reading that their chap collected a couple of days ago.

We pay by monthly direct debit. After the last quarter, we were £32 in credit. After the current quarter, we are now £38 in credit. We've always without exception been in credit with them.

All very good, but why have they then stated that they believe we may not be paying enough, and they will be increasing our monthly direct debit by £2 with immediate effect? If we have any problems with this, the onus is on us to phone them. I don't suppose they will deal with me, as the account is in my husband's name, although the payments come out of my bank account. More hassle :rolleyes: .

This seems very underhand and quite unnecessary. I know they have increased their prices recently, but if we are still increasing our credit balance even during the coldest quarter of the year, then what's going on? :mad:

IvanOpinion

I am not overly familiar with the NPower systems (I know a little about some of them but not all) but assume they basically follow similar rules to other companies. The calculation of an instalment amount is very complex and the system (all done by a cmputer) usually tries to project your usage and balance based on an estimate 1 year hence. This requires use of the crystal ball (otherwise known as an estimation routine). Depending on how sophisticated the estimation routnie is it will use paths such as 'corresponding period last year' (which is the most accurate but may fail if they have not had enough readings or had readings in the right places) ... if it does fail then it might try to estimate based on the actual consumption you used in the last year (again there are many reasons why this might fail) ... if this fails they might try using an 'agreed annual consumption' and if that fails they might have a backstop that is based on the tariff itself or the premises type etc. etc. However remember that this is just an estimate.

The power companies have been getting a lot of flak from customers because some customers have been lumbered with quite large bills. This is often because the company has not been able to get an actual reading (and the customer has not sent in a reading). Often you see such people venting on public boards blaming the power companies. They have therefore been trying to improve the accuracy of their estimation process and, (allegedly) in some cases deliberately over estimating, all in an attempt to reduce the shock when they do manage to get an actual reading.

Npower will also have probably included an allowance for any additional projected price rises during the period of the assessment.

I think it is a case of they do their best to figure out what you are going to use next year, how much it is going to cost and then from that they work out a direct debit amount. The calculations are all done by computer and the reassessment is issued automatically (by the computer .. the first an operator will know about it is if you phone the call centre to query it) You can phone the call centre and get the direct debit amended to a value that suits yourself (within reason).

However keep an eye on the broker sites .. things are afoot.

Ivan

Bogof_Babe

Wow, thanks Ivan for that comprehensive reply. I'll probably let them go ahead, both for the reasons you give and because for £2 a month it is not really a big deal. Besides which, I like the comfort factor of being in credit.

I'm intrigued by your last sentence though! :think:

Bri_2205

This will be the first reassessment using the prices effective from January 2006 (since the rise), hence the increase.

You can, of course, call them / email them to ask for your payments to remain the same as long as you are aware it may not cover your usage on the new rates.

Npower take the total amount of units used for the previous 12 months & calculate how much that would cost on the current rates & divide by 12 to work out your payments.

Busybody

: :T We are with seeboard and last Saturday we got a letter saying that they are putting our direct debit up to £95 we currently pay £30 and are not in debt to them at all. I phoned to speak to them about it but they wouldnt speak to me because my husbands name is on the bill, well I know all about data protection and all that but it was me who set up the account with seeboard. they put it in my husbands name! and me who they phoned and begged to stay with them when I threatened to leave

Anyway my husband had to find the time to phone them and told them they could have £40 a month and nothing more they agreed!!!!! :T :beer:

IvanOpinion

Busybody
Be careful. They may have agreed to £40 per month but that does not mean that you do not owe more. If the monthly usage is higher than £40 they will eventually come after you for the rest. Given that you are not in debt then the jump to £95 seems very odd ... however just keep an eye on it over the first quarter or two.

Ivan

-=Mr-J=-

I was always in credit when with nPower.
Even got a £105 payment back into my bank account one time.

Its okay having a few pounds in credit but at the end of the day the money is earning interest which is not passed back to the customer.

Utility companies must be making a fortune this way and IMHO unnecessary substantial increases, like described here, can only be to boost this cash cow.

star1_2

Intresting post....

I had been with Npower for 2+ years (so they understood my usage), they wrote to me and increaseing my DD payment .... 12 months later, when I submitted my reading - I was a MASSIVE £360+ in credit. I asked for this back, they sent it .... then when I suggested the payments were reduced accordingly by £30 a month (as it was clear that based on the previous years, I wasnt using as much as they esitmated) - the lady on the phone said "the computer wont let me"!, she ended up having to get a supervisor put this reduction through as a manual adjustment.

The experience made me realize how inaccurate their "estimating was" .... despite the fact they had 2 years history !!

As others have said ..... regularly submit manual readings - to ensure that:-
a) you don't get any nasty surprises if your usage is higher than your DD
b) you don't let them get the intrest if they take too much from you!