EON direct debit increase

KimYeovil

DirectDebacle wrote: »

Then at some point you are going to have the same problem as the OP.

As an example lets say your energy costs £1200 p.a. and 75% of that energy is consumed in the 6 months Oct-March.

Your DD is set at 1/12th annual cost @ £100 per month.

Over the next 18 months you will use £2250 of energy but only have paid £1800.

This £450 shortfall will have to be paid as a large bill at the end of winter. The E.ON rep assures customers their manipulation of the DD scheme is designed to avoid this. The only other way is that when you joined E.ON the DD was set to achieve a zero balance in April 2011 which would comprise of 2 winter periods and one summer. In this example it would be £125 p.m.

But an 18 month plan will not be 18 times the monthly amount - it should take to account a double winter period and be so adjusted.

The trouble is there is no disincentive for people who pay by direct debit to mess around and make additional payments. Suppliers have to start penalising those who choose not to pay in advance. But this will not happen.

JennyR68

Andy_WSM wrote: »

Urm, that's not the way I see it.

DD is discounted, due to the reduced costs of collecting payments from the customer.
The other methods are dearer because it costs more to collect money by any other method.

Why should a DD customer, who always pays up front, on time, with no hassle to Eon, subsidise the other payment methods? I don't want to pay towards the debtors and people that have key meters etc etc. If it costs more to run their chosen payment methods then they should pay for it.

I agree I don't want to subsidise them either. But I do want the DD scheme to work as it was originally 'sold as' an easy way to budget your years bill. i.e the desired point for a zero balance being at the end of the year of starting the plan. I don't want to be facing continual hikes or extra payments to suit a stupidly placed '0' point on the providers agenda.

Like I said. I would be quite happy to pay exactly what I owe every month, on time by DD but that option isn't offered by many. If I payed quarterly D.D I don't get a DD discount.

I know from being in busines myself you are charged for every payment in to your account. Monthly D.D's cost more to process than quarterly DD's as there is obviously more payments. So monthly DD's is not the cheapest way to gather money for the provider, there must be another agenda for the encouragement to pay that way, and it certainly doesn't seem like it's to make life easier for the customers anymore.

Andy_WSM

JennyR68 wrote: »

So monthly DD's is not the cheapest way to gather money for the provider, there must be another agenda for the encouragement to pay that way, and it certainly doesn't seem like it's to make life easier for the customers anymore.

This one is easy to work out. If you paid quarterly, then the supplier would effectively be giving a whole quarters interest free finance, to the tune of many hundreds of pounds for millions of customers. Not good business sense!

By taking payments monthly, this reduces the amount they are "lending". They will have the benefit of the customers money in their account some months, and the customer gets the benefit of interest free finance others.

JennyR68

Andy_WSM wrote: »

This one is easy to work out. If you paid quarterly, then the supplier would effectively be giving a whole quarters interest free finance, to the tune of many hundreds of pounds for millions of customers. Not good business sense!

By taking payments monthly, this reduces the amount they are "lending". They will have the benefit of the customers money in their account some months, and the customer gets the benefit of interest free finance others.

I don't want to pay quarterly though, that's what I'm saying. I want to pay monthly what I owe them but they don't allow to do that. Not even British Gas who do variable monthly payments have it on their best tarrifs.

So what does that make me? some minority customer who isn't really allowed to choose how they want to pay?

Haarlem

E.ON_Company_Representative:_Helena wrote: »

Hi DirectDebacle,

The spring review started around April last year, this was changed due to feedback from customers requesting not to left in debt after winter bills, as this then left them with much higher payments to pay back the debt.

As others have said, you will also receive a Direct Debit discount.

Helena

Changing the rules like this to the advantage of the company, and against how MSE is trying to champion the customer. I cannot believe that customers have requested to finance EON for 6 months rather than a review in the Autumn. Treating customers intelligence like this is why I would never move to EON.

My supplier Atlantic do not operate in this way, so I will stay with them.

Spittingmad

Hi

I can relate to what everyone is saying regarding direct debit increases.

My 12 month contract ended with EON 1.11.11 as expected rates increased but I gave them the benefit of the doubt as the DD only increased by a small monthly amount to reflect the additional tariff increase costs. My bill was not in arrears and after reviewing a year of bills with an actual meter reading a new direct debit was agreed for the next 12 months.

My direct debit increased from £96 to £108 (11% increase) per month for exlectricty and gas on a online tariff. So I stayed put to see how prices went in general.

In January 2012 I get a letter telling me that my DD will increase from Feb 2012 to £156 (31% increase). This increase was not due to increase in usage but to do with zero balance targets for April 2012. That represented a total of 39% increase in direct debit however the tariff had not changed nor had my usage. All that has changed is EON wishing to treat me along with other customers as a lender. For every million customers that would generate a massive secondary income off the back of customers many of which are in energy poverty.

I was told categorily despite putting a very strong argument against a rise in DD with clear justification why it should remain the same they insisted I pay the increase. I threatened to leave (which i have now) but this had no effect. I insisted that the call be logged as a complaint but this was not as when they called to 'beg' me to stay they had no record of the call!!

They offered a £112 direct debit as Scottish power has calculated a DD of £102 on actual 12 month KW usage from EON bills and they agreed with me that £156 was way too high. EON agreed during the begging call that they could not compete with Scottish Power on tariff. When i asked why they couldnt reduce my DD to £112 as quoted they said it was only exclusive to staying with them. Funny that!! Interesting I am sure that sky news reported on this a week ago stating that EON has been in trouble for doing this and been told to stop.

So I am now moving back to reasonable DD that reflects my usage that incidentally the last 12 months of usage reflects a 12 year average in the same property.

All i can say to EON is change your policy or risk losing thousands of customers!!

backfoot

Spittingmad,

Your expereince with Eon is very familiar.

A number of us have tried to bring this abuse to the attention of the Regulator.

You should let Consumer Focus have full details as per the attached thread. We are making good progress towards stopping this malpractice but more customer evidence would help.

https://forums.moneysavingexpert.com/discussion/3686969