Do energy companies charge interest on debts?

skittis

I currently have an outstanding debt with scottish power, not my fault. Funnily enough they were charging too little per month for the amount of electricity and gas my flatmates and I were using.

Can they charge interest on my debt to them?

KimYeovil

They were not charging too little. You were not paying enough - the meters are in your home, not the supplier's office. Why did you choose to not bother to compare your meter readings with your bills?

But, no, unfortunately, suppliers do not charge interest on debts. But they can, if they like.

Dave_save

I'm in the same position with EDF. I gave them exact figures for my annual usage when I switched in Oct. They set my DDs at a level which means my winter gas usage costs are higher than the total I've paid. I'm currently in a debit situation of around £120, which they will no doubt take at the annual review or when the debt exceeds a prescribed amount. They won't be charging me interest.... FORTUNATELY! And of course, I prefer the money in MY pocket not theirs.

BargainGalore

Hope you keep regularly records, we have had many a time posts on here from people who share telling is they been chased for a debt and they chase the bill payer so make sure when you leave you take readings of your meter and tell the supplier

kjsmith7

Why don't people check their statements? Obviously you may go into a little debit in the Winter, but at the same time you should be into credit in the Autumn ready for the Winter bill. Seeing "Account balance: £300 in debit" in October is just asking for trouble

Dave save, I understand that your situation was based on an inaccurate calculation. But to others who just bury their heads in the sand, how about you pay the balance off in full if you prefer the money in your pocket? Then, just manage your bank account effectively, and just pay your bill quarterly, perhaps by variable direct debit so it'll only take what you owe. Then, you're never in credit or debit, and the money is in your pocket and no one elses? We have a separate 'bills' account (it's a basic bank account, only handles DDs and stores money, no cheque book or debit card, etc.) to help us do this.

I believe that interest should be charged on debts, but there we go. A credit meter/quarterly bill is a credit agreement after all. (waits for people to jump on me)

Dave_save

kjsmith7 wrote: »

Dave save, I understand that your situation was based on an inaccurate calculation

Actually EDF set my monthly DD at a level which was 1/12 of my projected usage for a year, based on accurate information. So the calculation was correct.

As for charging interest on debit amounts, it's swings and roundabouts. Why would you want the energy companies to charge interest on debits when they don't offer interest to those who are in credit (and I've been one of those in the past)?

kjsmith7

Fair point, but I don't believe they are legally allowed to gain interest on the credit balances? Not sure on that, might need some guru to confirm it haha

Grendel90

Dave_save wrote: »

Actually EDF set my monthly DD at a level which was 1/12 of my projected usage for a year, based on accurate information. So the calculation was correct.

As for charging interest on debit amounts, it's swings and roundabouts. Why would you want the energy companies to charge interest on debits when they don't offer interest to those who are in credit (and I've been one of those in the past)?

But that's how a Monthly DD works... In the winter months you'll build up a debit balance because your consumption is higher than the payments you make, Then in Spring/early Summer, when your consumption is lower than the payments you make you'll clear the debit. Finally you'll build credit in late Summer/Autumn and that credit will be used up when Winter comes around again.