Monthly DDs set far too low - Brit Gas account in debit

Theo_Cupier

In October last year I switched to British Gas Click 5 for both Gas & Electricity.

I pay by direct debit and when I joined them, I advised them of my previous year's consumption of both fuels down to the KWh, based on actual figures from my previous supplier.

British Gas then used this to calculate the amount of my monthly direct debit (Gas £47 & electricity £40 per month, for what it's worth).

I've been monitoring my usage this year - taking and recording weekly readings since I joined them - and I think my consumption of both is going to be largely comparable with the year prior to switching (down about 5% if anything).

According to my calculations, and theirs, I have used about £970 of gas in the 10+ months since I joined them.

However, I have paid them only around £400 in direct debit payments. This means my account is around £470 in debt to British Gas. I find this rather alarming.

The picture is similar for electricity but with a debit balance of only £100 or so on a total consumption of about £600.

On the face of it, my only options are to either clear the debit in a lump sum or to accept a revised DD arrangement with them for gas which will be set not only to cover the "true" cost of my gas going forward but also to recover the debit balance. I estimate this will probably lead to a 200% increase in the gas DD, to around £120 if they want to recover it within 12 months.

I struggle to believe that it is fair or reasonable for them to have recommended a Direct Debit amount which has left my account this far in debit - given that I gave them accurate and adequate information about my energy consumption?

My question is whether I have any rights or remedies or other options to resolve this situation beyond those I outlined above, in terms of clearing the debt?

Any help or advice is gratefully received.

vicshippers

I'm a little lost to how you didn't spot this before now when you've been doing some of the most efficient recording I've ever heard of...but regardless. It is your responsibility - the DD figure they give you is meant as a guide.

I think what they normally do is up your monthly DD to compensate for the debit as you suggest. You've had a year of low monthly costs, the next year unfortunately is the opposite.

Theo_Cupier

I've not "only just spotted it", I've only just got to the point where I want to speak about it on here - with the end of year coming up.

I noticed a debit towards the end of March but was sort of expecting it would start to unwind as we got into lower usage periods in summer. It has done, to an extent, but nowhere near as much as I had hoped.

I will confess to having been hiding the problem under the rug a little. At £47/month my DD payments were comparable with my previous supplier, even though the unit price was higher. So I admit that I knew there would be a bit of a shortfall at the end of the year and have been "enjoying" this period of low monthly costs.

What surprises is my previous calculations had suggested the DD needed to be in the region of £65. The truth seems to be that the DD should have been nearer £90 per month from the outset which just doesn't seem to stack up in terms of even my "worst case" projections. That would have equated to almost a 100% increase in gas unit prices over my previous supplier, which certainly wasn't the case.

What I find annoying is the wilful way in which British Gas recommended a DD amount that they must surely have known were going to be far, far too low to meet my consumption.

I accept that the debit is legitimate, I understand how it has happened. My point is that I disagree with British Gas's behaviour which has led to this. I'm lucky in that I can probably afford to live with a year of high DD costs, but others are not likely to be so fortunate.

I can't help wondering if there is some kind of consumer protection issue here which British Gas have stumbled into. In the "best" case they have tied me in to a second year of service whilst the DD unwinds the debt (assuming I don't want to make a lump payment). In the "worst" case they could easily have put me in a position where I can't afford to pay the DD so that I am obliged to move onto something like a prepayment meter which (historically, at least) has been on a higher tariff than monthly DD payment. It just feels like sharp practise - in either case they worked to their advantage, not mine in the long term.

Joyful

It is definitely not in BG's interest to have you in debit. Last winter was a lot colder than normal. My Gas usage increased by over 100%. Knowing that my DD would not get assessed till later in the year I took the responsibility to increase my DD. You had this option too.

Energy companies cannot win. People either complain they deliberately set DD's too high or too low! Customers need to take responsibility.

duggo1

Theo_Cupier wrote: »

I will confess to having been hiding the problem under the rug a little. At £47/month my DD payments were comparable with my previous supplier, even though the unit price was higher.

I'm confused or I'm reading it wrong. It sounds like with your new supplier the unit price was more expensive.

Cardew

It is rather ironic that there has just been an article on MSE and a thread about DD's being set too high:

This is the discussion thread for the following MSE news story:

"Energy firms will have to stop unfairly grabbing consumers' money by setting exorbitant direct debits (DD) demands, under propsoals annonced today by the industry regulator.

The move follows an MSE campaign to stop providers making millions by setting payment demands well in excess of your true consumption, as often happens ..."

Your figures are difficult to understand.

You state that £47 was comparable with your previous supplier - and they had higher unit prices.
You have cut your consumption by 5%.

So that would appear to indicate that from the information you supplied to BG, that they set the DD correctly at £40.
Yet you state:

my previous calculations had suggested the DD needed to be in the region of £65. The truth seems to be that the DD should have been nearer £90 per month from the outset

Confusing - and you think BG are to blame?

vicshippers

Completely agree with Cardew - I'm confused too. It's impossible for your unit price to be lower, consumption lower and bills higher. I would focus on the problem there before I started blaming BG...who as far as I can see have done nothing wrong.

If you were a long standing customer, with a long comparable history and then they suggested a DD that was far too low I could understand your complaint but you were a new customer...how are they meant to predict what you are going to use more accurately than you can?

Also, apologies - when I said 'I'm a little lost to how you didn't spot this before now' I meant because you have been taking readings since you joined them...

[Deleted User]

why didn`t you ring them re changing your DD? I have never had a problem with them, You just have to say what you would like it to be. It sounds a bit `head in the sand` about it imo.