DO Utility comps Earn interest on overpayments

ceedy

Having just got off the phone claiming back over 300 pounds over payment on the gas Bill, The customer service person stated categorically when this subject came up,
that ..
They ( southern Electric) do not earn interest on overpayment amounts , as " they are not allowed to?"

This seems to be in conflict with info on this Site and the general opinion on the Web.

Anyone got any info on this ??

Dave_save

There were reports last year of utility companies holding up to £1 billion in overpayments by the end of 2010. I don't think this took into account the number of customers who were in debt, or those who paid by cheque or cash after the energy was consumed.

Of course they make interest out of balances in their accounts. On the other hand this method of payment should keep tariffs lower. Those that are losing out are those who pay quarterly or who are on prepay metering.

KimYeovil

ceedy wrote: »

This seems to be in conflict with info on this Site and the general opinion on the Web.

I think you will find that the info on this site suggests that they do not earn interest on these payments. Where does it suggest they do?

Cardew

There seems to be a lot of confusion on this issue.

Ofgem some while ago stated that overall for companies, the debit balances of customers was more than their credit balances. That seems to be supported by many complaints on MSE of huge debit balances being run up - and customers being allowed to pay their debts off interest free over a year or two.

However WHICH state that they do get interest on overpayments.

http://www.guardian.co.uk/money/2009/mar/25/energy-suppliers-direct-debit-which-survey

Some Utility company employees have posted that there is a ruling that companies cannot make profits from credit balances on accounts - so I asume any interest on those monies is set against the interest they lose from accounts in debt?????

I do find this whole discussion rather acedemic however. We don't have to pay by Direct Debit as we can get quarterly billing and get up to 3 months credit on the gas/electricity we have received.

Mostly we elect to pay by DD as we receive a DD discount that dwarfs any lost interest on a credit balance(if we have one) and sheer convenience.

kippen_noedel

my largest credit for this current payment cycle was £487, I received £40 tax free in discount for paying by DD, much more than anything I would have got for putting that money in any bank account. by the end of April I expect to be no more than £50-£60 in credit. I will expect that if no price increases to have my DD reduced proportionately.

So I don;t care if they get any interest on monies held, I get a far better return on the cash by receiving a tax free discount.