Southern Electric Economy 7 overcharge - any advice about compensation?

schlimig

I was looking through my mother's bills a few days ago and noticed that on her Economy 7 tariff readings, the night rate units had not increased since the 2009 bill she showed me.

I spoke to Southern Electric today who admitted that they had switched off the Economy 7 clock on her meter in 2005 but had not changed her tariff accordingly, leaving her paying the more expensive daytime unit costs and getting no benefit from the Economy 7 rate.

They have agreed to change the meter and to calculate and refund the money she has been overcharged over the past 5 years (which by their rough 30% estimate is around the £800-900 mark). I really feel like some compensation is called for here as well though, not simply the money which they shouldn't have been charging her in the first place. They have after all freely admitted that it was their mistake here and as a software engineer myself I know what a simple calculation it would have been for them to spot this one automatically after their initial error.

Can anyone advise on how best to go about this, or does anyone else have experience with this scenario and requesting compensation? I'd be most grateful for any advice or guidance

Premier_2

schlimig wrote: »

...I really feel like some compensation is called for here as well though,...

I see the compo culture is still alive and kicking in some quarters of the UK :cool:

Compo for what exactly?
They made a mistake, and as soon as the mistake was identified to them, they agreed to rectify the mistake.

Have you ever made a mistake? How much compo do you pay out for your mistakes?

schlimig

Premier wrote: »

I see the compo culture is still alive and kicking in some quarters of the UK :cool:

Compo for what exactly?
They made a mistake, and as soon as the mistake was identified to them, they agreed to rectify the mistake.

Have you ever made a mistake? How much compo do you pay out for your mistakes?

Oh please just get off of your high horse and take your snarky condescension somewhere else! I didn't ask for people like you to come on here and be patronizing and rude - I asked SPECIFICALLY for advice on how to proceed with investigation of compensation on this matter.

Not that it is any of your business, but yes I have paid compensation out when I've made mistakes. I pay if I miss a credit card payment deadline, I pay if I go overdrawn or pay a bill late (not that I do this often!). I run my own business and on the odd occasion where we've made a mistake and inconvenienced a customer, we've made reductions in the bill to compensate the customer for the inconvenience/poor service.

By your demarcation of me as "some quarters" you clearly believe you are better than me on this issue at least and that you are infallibly correct in your opinion. You are not!

As a very crude calculation, which is not accurate, the inflation on £850 of money in 2005 brings it up to around the £950-960 mark today. This would obviously need to be retrospectively calculated at historical inflation rates as the amount grew over the 5 year period. This and the amount of interest that either Southern Electric/my mother have/would have earned in a standard bank account should be considered at a minimum to compensate my mother. This is money that Southern Electric should not have had and my mother should - but for their actions and failure to correctly administer her account she would have had it so compensation is in order.

I did not once mention an amount - I'm not after some ridiculous amount of money here, just what is fair and right.

Think before you post - you were wrong here and you've made me seriously angry with your unwarranted and unwanted remarks. :mad:

Premier_2

schlimig wrote: »

Oh please just get off of your high horse and take your snarky condescension somewhere else! I didn't ask for people like you to come on here and be patronizing and rude - I asked SPECIFICALLY for advice on how to proceed with investigation of compensation on this matter.
...

And I asked SPECIFICALLY what you wanted compo for, exactly.

macman

It seems that the only compensation your mother is entitled to is the interest on the additional money she has paid to SE rather than has sitting in her bank account. So on £800 over a year or so, £25 would be quite generous? She has not suffered any other material loss that I can see.

schlimig

Premier wrote: »

And I asked SPECIFICALLY what you wanted compo for, exactly.

I said exactly what the compensation should be for, please read it again! I'll lay out out in a more generalised example for you so that you can understand what I'm getting at:

If I spent £1000 in 2005 and got 10 items for that money, to buy the equivalent 10 items now in 2010 would cost me around £1150 thanks to inflation of sterling.

Consequently, if a company had taken £1000 from me in 2005 when they should not have done (in a lump sum) and then in 2010 agreed to pay the £1000 back to me, to match inflation they should be paying me £1150. If I am only paid back £1000 they have ignored inflation and are literally devaluing sterling in this transaction.

Obviously the amount grew over the 5 years and the rate of inflation changed along the way, so this is far from the simple calculation which I outlined above.

macman wrote: »

It seems that the only compensation your mother is entitled to is the interest on the additional money she has paid to SE rather than has sitting in her bank account. So on £800 over a year or so, £25 would be quite generous? She has not suffered any other material loss that I can see.

As I just said above, the inflation/devaluation matter is additional material loss over interest. There is also the fact that my mother had been using electricity at night during the Economy 7 rate (or so she believed) and has not benefited from the savings that she should have had from that lower rate.

macman

It's entirely up to you as to what you claim for, but they might well argue that in turn your mother had a duty of care to read the bills she has received since 2005 and therefore might have noticed earlier that the cheap rate reading had not advanced. Has no meter reading been submitted by her in 5 years-if so a lot of her bills must have been on estimated readings.

schlimig

There have indeed been a lot of estimated readings. My mother has been in extremely poor health and has been in and out of hospital for extended periods (in total well over a year in the last 5) and honestly it is one of those things which has been missed. Looking back over the bills and letters, Southern Electric have sent several letters (at her and my request) reviewing her energy tariff and concluding she is on the best one according to her needs and usage, so I'd argue right back that they had failed in their duty there too.

schlimig

Well I've done the calculations myself to adjust for inflation and interest at 2.99% (the current top easy access saver rate shown on MSE) and using conservative estimates the figure is £1010 (rounded down to nearest £10)

dogshome

Hi schlimig - You were right first time, what you should be looking for is recompense for the reduced purchasing power of money repaid today, that was wrongly paid out 5, 4, 3, 2, 1 years ago

Remember that if at year 5, RPI was at 4% and the overpayment was £100, you move £104 forward to year 4, which then apart from year 4's overcharge, also picks up year 4's RPI inflation So if year 4's RPI is 3%, the £104 becomes £107.12 and so on for all past years till today.

sofa-spud

schlimig wrote: »

Well I've done the calculations myself to adjust for inflation and interest at 2.99% (the current top easy access saver rate shown on MSE) and using conservative estimates the figure is £1010 (rounded down to nearest £10)

You are entitled to claim interest at the rate of 8% per annum, 0.022% per day under section 69 of the County Courts Act 1984. Taken from HMCS document EX302.
This is not compounded, it is simply the amount owed * the number of days * the rate.
e.g. if £100 was owed from exactly 2 years ago then 730 days* 0.022% * 100 = £16.06 interest. The extra 6p comes from rounding the 8% to 0.022%, these are the figures given in the above doc (for any pedants out there it actually works out to 0.0219%).