British Gas won't let me have my money!

samrich1

I am around £320 in credit on my Electricity account with British Gas, the meter has read twice in the last month so it's accurate. I requested a payment of a portion of said credit (not all so I'm covered for future payments) and they said I couldn't have it until my annual review in May, and if I insisted on having it my payment plan would be cancelled. Can they do this? Sit on other peoples money and earn interest on it? Or penalise their customers for wanting their own money back?

Cardew

Welcome to the forum.

Are you electricity only or gas as well?

Yes they can do it, but normally will negotiate a little. If you are electricity only it is not surprising that they will not refund.

Is that £320 credit shown on the latest bill? and when was that bill?

Bear in mind that if you look at the bill on-line it shows your DD credits each month, but only debits quarterly. So I can be shown as £300 in credit today and get a £400 bill debited tomorrow.

Incidentally, if they refunded you, say, £200 now instead of waiting a further 3 months until May, with interest rates at about 1% they would lose 50 pence in interest.

kjsmith7

Interest is frozen on money from direct debits. It's illegal for them to claim any interest until it is fully cleared, or so I've heard.

If you want a refund, no problem, just ask them to cancel it or cancel it yourself. Bear in mind that your refund will be a cheque if you cancel it yourself, whereas you'll have the option of having it refunded back into your bank account if you get them to cancel it.

If you call again, ask them what your balance is at that very second. As Cardew has said, if you bill online it may not be an accurate balance.

The only way to refund from a direct debit is to cancel it and then reset it up again. Bear in mind that if the amount you pay is based on the amount of credit you have (for instance, you are paying £30 less a month because you have £300 in credit), your DD amount may go up.

Hope that helps!!

Cardew

kjsmith7 wrote: »

Interest is frozen on money from direct debits. It's illegal for them to claim any interest until it is fully cleared, or so I've heard.

If you want a refund, no problem, just ask them to cancel it or cancel it yourself. Bear in mind that your refund will be a cheque if you cancel it yourself, whereas you'll have the option of having it refunded back into your bank account if you get them to cancel it.

If you call again, ask them what your balance is at that very second. As Cardew has said, if you bill online it may not be an accurate balance.

The only way to refund from a direct debit is to cancel it and then reset it up again. Bear in mind that if the amount you pay is based on the amount of credit you have (for instance, you are paying £30 less a month because you have £300 in credit), your DD amount may go up.

Hope that helps!!

Bear in mind that if you cancel a Direct Debit you will lose all your Direct Debit discount for a period - which is vastly more than any interest lost.

One of the major reasons for giving a large Direct Debit discount is to minimise the paperwork and make the account simple to administer - if they have to change a DD outside of the review period it is extra work.

dave461_2

Are you tied in?
If not move supplier and you will get your credit back when you move supplier.
You could then move back to british gas if you wanted.

kjsmith7

dave461 wrote: »

Are you tied in?
If not move supplier and you will get your credit back when you move supplier.
You could then move back to british gas if you wanted.

That seems a lot of work just to get some credit back. Just cancel the Direct Debit, it is a choice of payment, and not a stipulation, on any tariff that British Gas offer.

Cardew

kjsmith7 wrote: »

That seems a lot of work just to get some credit back. Just cancel the Direct Debit, it is a choice of payment, and not a stipulation, on any tariff that British Gas offer.

The OP's objection seems to be that BG are getting a little bit of interest that they should have.

The Direct Debit discount is massively more than the interest, so if you cancel your DD and go on quarterly payments - even for one bill - you will have lost a lot more money.

Magentasue

Don't be too hasty about cancelling the DD. As explained you'll lose the discount. If you're electricity only, you need that credit balance. If you don't have electric heating, you could ask what they would be prepared to reduce your DD to, or how much they could refund. I can't believe they won't let you have any of it if you don't have electric heating.

kjsmith7

Cardew wrote: »

The OP's objection seems to be that BG are getting a little bit of interest that they should have.

The Direct Debit discount is massively more than the interest, so if you cancel your DD and go on quarterly payments - even for one bill - you will have lost a lot more money.

Ahh, I can see what you're saying. The Direct Debit discounts at BG are just being changed (in line with the price decrease) and going down to £35 per fuel a year I do believe (dual fuel is not changing). This means that it's a max discount of £8.75 per quarter, based on consumption, so you are correct in what you are saying.

When I was on Direct Debit, I would only get around £3 discount a quarter, so it wasn't really worth the hassle for me (so I set up a standing order, and I settle the balance quarterly), but if you're getting a fairly decent discount, I am inclined to agree.

At the same time, if a refund is what is required, it can be obtained. I think it's a case of just deciding what is wanted more.

kjsmith7

Also, it is possible to cancel a direct debit, refund and go back on to a direct debit (as long as you haven't done this more than once or sometimes twice in a year). It's not guaranteed that the amount you get offered the second time around will be the same as before, it may be less, the same or more.

Cardew

kjsmith7 wrote: »

Ahh, I can see what you're saying. The Direct Debit discounts at BG are just being changed (in line with the price decrease) and going down to £35 per fuel a year I do believe (dual fuel is not changing). This means that it's a max discount of £8.75 per quarter, based on consumption, so you are correct in what you are saying.

When I was on Direct Debit, I would only get around £3 discount a quarter, so it wasn't really worth the hassle for me (so I set up a standing order, and I settle the balance quarterly), but if you're getting a fairly decent discount, I am inclined to agree.

At the same time, if a refund is what is required, it can be obtained. I think it's a case of just deciding what is wanted more.

Well it depends what BG tariff you are on of course! But even if it were dropped to £35 a year, you would need about £3,000 in a bank all year to get that £35 in interest.

Even if you lost DD discount for just a quarter(£8.75) that is a big price to pay to get back £200 3 months early and gain less than a pound in interest.

Anyway we haven't yet established that the credit balance is not justified at this time of the year.