EON direct debit increase

plumfin

Hi, I may have duplicated this post so sorry if I have.

EON have contacted me to say that they need to increase my dd from £50 per month to £142 to allow for the increased electricity we normally use up to May. After last quarter, we are £163 in arrears, which we normally pay off over the summer as we use less electricity. EON are telling me that I have to get my account to £0 in May as that is when they review it all.

I spoke to a man there who was polite but not interested at all that this is a 300% jump in cost just to balance their books and that not to pay this would land me in debt with them, an action he can't allow.

Can they do this? i have been with them for 3 years and never had this problem before. We are on fixed online v4, and do use a lot of heat over the winter as we only have storage heaters, about 12000kw per annum.

Any ideas? many thanks, kelly

Premier_2

Your monthly DD should ideally be about 1/12 of the amount of energy you consume in a year.

If you've been paying less than this, that would explain why you've accrued a shortfall and this will obviously need to be repaid. You should be able to negotiate the repayment of the shartfall over a reasonably agreed period.

Find out the breakdown of the £142 they want to collect, accept (after confirming yourself) that you'll have to pay 1/12 of what you consume annually and concentrate on negotiating the repayment portion of any shortfall you owe.

plumfin

Thanks Premier. I estimate that we pay £900 annually, so 1/12 is £75. Their argument is that our bill last year for the next quarter came to £350, so that, along with the current debit of £163 = £510 approx (not good at maths). At the current rate, we will have paid £150, if we increase it, it only goes to £225. My real problem with them is that I have to "clear" the account in may, although this is not practical for me. I have not come across this before.

dogshome

Hi plumfin - Your monthly D/debit is supposed to clear your annual bill by 12 equal monthly equal instalments, but if your D/D's are correctly set to clear you annual bill, the month they will clear your annual bill will depend on the month you started, and not some other month chosen by your supplier

Distibutors are tying to push up margins by decreasing debt over the winter, but saying little abount the credits they are holding over summer. Work out you annual bill, check that your 12 D/D's willcover it, and if the month that, that happens is different form EON's May deadline, tell them to keep your D/D's at the same level or you will move supplier

Grebe

Hi plumfin, Eon tried the same with me not too long ago.
They tried to up my payments 6 months into the second year of being with them. Trying to say I was using more power than they had reckoned I would so upping my payment from £90 a month to £135. I did a few sums and and while I was slightly underpaid the amount would have been well covered during the summer.
I called them saying it was way too much of an increase, quoting my maths and saying I was only willing to accept and increase of £5 just to cover my bases, then calling their bluff if that was no good to them then I would just have to find a new supplier.
They settled.

brewerdave

Its the old cash flow argument.
Like a lot of people I have always run in a debit position thru the Winter which then gets paid back during the Summer months so that I normally am "balanced/in small credit" by August.
However, most of the utility companies now want to gain 4-6 months cash flow by bringing the balance point forward to April/May. I've managed to resist so far by switching around August/September when I'm usually owed money but I have a suspicion that its going to get harder to organise in future!!

E.ON_Company_Representative:_Helena

Hi plumfin,

I will try and explain how the Direct Debit should work.

If your account is now in debt, it means that your monthly payments have not been enough to cover the amount of energy that you have used.

It sounds like your payments have been increased to achieve a zero balance for your review date.

It should work by building up a credit balance over the summer months when you use less energy, this credit then goes towards your larger winter bills, you should then have a zero balance at your review date.

The review date is the time when the payments should be re-calculated for the next 12 months, however, you can adjust your payments at any time if you feel your account is falling in to debt or too much credit, as consumption can change.

The arrangement wouldn't be set up to pay debt off over the summer, then build up more debt in the winter as this means that you would just be catching up all the time.

The payment amount can also be higher depending on the time of year you set this up, if you set up a Direct Debit just before winter the payments will be higher as there won't be any credit on the account from summer payments and a zero balance for the review will still need to be achieved.

If you are unable to clear the balance in the payments that have been requested, I would contact E.ON again and explain this, see if they can spread the debt over a slightly longer period of time.

Helena

spiro

You say you have built up a debit of £163 over the last quarter, that means you are using £54 more elec per month that you are paying so it means you need to be paying £50 (original DD) plus £54 (due to higher prices/increased consumption) plus £54 to cover debit from last quarter which adds up to £158 . Obviously after May it should drop.

DirectDebacle

E.ON_Company_Representative:_Helena wrote: »

Hi plumfin,

I will try and explain how the Direct Debit should work.......


The payment amount can also be higher depending on the time of year you set this up, if you set up a Direct Debit just before winter the payments will be higher as there won't be any credit on the account from summer payments and a zero balance for the review will still need to be achieved.


Helena

Most of this reps post is explaining how the energy company would like a DD arrangement to work and not how it was intended to work..

The statement above is mis-leading and illustrates their strategy perfectly. Whatever month you commence the DD arrangement it is for a 12 month period. You say your avge annual consumption is approx 12000kwh per annum and you are on a fixed price. Therefore if you start the DD on 1st January the payments will be the same as if they were started on 1st June. 12000kWh*price/12 .

If you did not join the DD scheme in May then May is not the review date and therefore a zero balance is not required.

We have had a hard winter and it may be the case that your annual consumption will be over your usual 12000kWh. You can estimate this additional usage and adjust the DD to achieve a zero balance by your anniversary date if it is not May.

The whole point of the DD system is to even out payments over a year which will mean that at times you will be in credit and at others in debit. Many energy companies are now trying to set arbitrary review dates, usually in the spring, and where these review dates are not anniversary dates then the customer should challenge them.

E.ON_Company_Representative:_Helena

DirectDebacle wrote: »

The statement above is mis-leading and illustrates their strategy perfectly. Whatever month you commence the DD arrangement it is for a 12 month period. You say your avge annual consumption is approx 12000kwh per annum and you are on a fixed price. Therefore if you start the DD on 1st January the payments will be the same as if they were started on 1st June. 12000kWh*price/12 .

Hi DirectDebacle,

E.ON review Direct Debit payments and accounts in the spring, we don't have an annual review 12 months on from the date that the Direct Debit started.

Being on fixed unit prices will make no difference,as usage can go up or down, therefore, making the bills higher or lower.

So if you set up a Direct Debit in say November, this monthly figure would be higher as you would be paying for the most expensive months of the year and still try to achive a zero balance for the spring.

If you set up your Direct Debit in May, you would have chace to build up credit over the summer to go towards the larger winter bills and again have a zero balance in the spring.

Each account will be calculated individually, as some may not include the first spring review as the Direct Debit may have been set up too close to this date, therefore, moving this to the next spring.

Helena

JennyR68

That's what I was thinking DirectDebacle. Surely they expect high's and lows and you can't be in credit all the time or it defeats the purpose of the plan. I've just transferred to EDF on 27th of Jan, my first payment doesn't come out until 7th March. If they were to insist on a zero balance in May I'd be in a right pickle. As it is they say they will review every 6 months, I'm interested to see how this will work. Though with EDF it seems they only ever let you have £150 leeway at review, any more than that and they take it out your account. Has any one any experience of this with them as to how it works out?

If it wasn't for the fact they discount 6% for DD which in my case being all electric is a hefty sum then I'd much rather pay quarterly as each bill is due.