Beware The Reduced Monthly Payment Scam

Conor_3

After a lifetime of being on quarterly billing and constantly being told I can save money by switching to monthly direct debit, 12 months ago I took the plunge.

Using the various comparison sites, I phoned a few suppliers up. They all asked me what my usual bill was and offered me up to a 35% reduction over what my normal quarterly bill would be split into monthly payments. I was with British Gas at the time and they were apparently very expensive, had just had a price hike so silly old me thought what the heck and felt quite impressed.

Sign up in autumn so the first 6 months were over winter and I built up arrears of about £100. About 4 months in they had a quietly introduced price increase but didn't raise the direct debit. Phoned them in June to query the arrears to be told that it would all be OK as the account balances itself out over summer when gas/electricity consumption drops. OK, I thought.

So 12 months on and the arrears are £220. Phoned them up, they looked at my usage over the last 12 months and suddenly decided that the monthly direct debit to cover my actual usage needed to be double what it was!!!! WHAT THE HELL? Even worse, to reduce the arrears, they wanted to TRIPLE IT!!!!

So I phoned up British Gas and asked about the prices for quarterly billing for the kWh and standing charges. When I worked out their prices compared to the supplier I'm with which is listed in the top 3 at USwitch.com, do you know how much extra my bill was? 8 QUID. A mere 5% more than the third cheapest supplier in the UK (who has disgusting customer service compared to BG) and that was for payment by the old fashioned paper quarterly billing, not monthly DD which would have been even less.

So phones back supplier to tell them to increase the direct debit to an amount of my choosing. They tell me the arrears have to be cleared in 6 months so the payment would be unacceptable or could I pay the arrears off? As you can imagine, I went into an overdrive rant, told them they conned people into signing up with them by offering low monthly payments but neglecting to say/hiding the prices, that it was all a big scam and that I wouldn't pay them a lump sum or increase the level of direct debit.

FOR THE FIRST TIME IN 5 YEARS, BECAUSE OF A SCAM, I NOW OWE SOMEONE MONEY. Going to have to change the sig file

MORAL OF THIS TALE? Don't believe the wonderful prices comparison sites return. You have to phone them, get the unit costs and standing charge them compare them with what you pay for that now. THERE IS VERY LITTLE DIFFERENCE. When you actually do the maths, it may surprise you.

Cardew

This subject has been covered on a number of threads.

The comparison sites and the operators at the utility companies make their money by getting customers to change suppliers. So in almost every case they will fix a direct debit at whatever level it takes to get a customer to swop - it doesn't matter to them if you run up a deficit at the end of the first year as they still get their bonus.

There are scores of threads complaining that this has happened.

People really should get the message that a monthly direct debit has very little relevance to an annual bill for gas/electricity/water.

The only way to work out if there are savings to be made is by taking your annual consumption in kWh and, using the various tariffs, calculating your annual bill.