EON raising monthly DD

davehills

it's just a way for utility companies to increase their profits. They earn money on all the credits that people build up.

There's absolutely no reason why they couldn't bill you in 12 equal installments for your years worth of utilities, and vary the DD slightly to cover any differences. If you went slightly overdrawn this'd be evened out by the times you were in credit.

However, they insist that you ALWAYS have a credit, sometimes amounting to many hundreds of pounds.

It's a fiddle, imho.

Cardew

davehills wrote: »

it's just a way for utility companies to increase their profits. They earn money on all the credits that people build up.

There's absolutely no reason why they couldn't bill you in 12 equal installments for your years worth of utilities, and vary the DD slightly to cover any differences. If you went slightly overdrawn this'd be evened out by the times you were in credit.

However, they insist that you ALWAYS have a credit, sometimes amounting to many hundreds of pounds.

It's a fiddle, imho.

Firstly the ideal for all companies is 12 equal installments, but that requires a very accurate crystal ball!!!

Secondly for many years the companies got flack for allowing people to run up large debit balances - witness the number of posts on MSE to this effect.

Take an example of someone having an average credit balance of say £100 over the year. What do they lose in interest? £2 a year?

Compare that with the large discounts given for payment by Direct Debit where you get 6% on the whole amount you pay with EON some £70+ for the average customer. Other companies give bigger discounts.

You don't have to pay by DD you can elect to pay quarterly and always be in debt to the company if you wish - just think of all the interest you will make!!!

Lastly if you can make out a reasoned case why your DD should be £xx instead of £yy I doubt many companies will refuse your request.

Colin_London

The EON Direct Debit policy can be downloaded here:

http://www.eonenergy.com/NR/rdonlyres/143C45C7-D919-42AF-8677-D05B91EED4F4/0/DD_Policy_web1.pdf?

includes the FAQ 'Why is my Direct Debit going up when my account is in credit?'

I noticed that EONs policy had changed a couple of years ago now when my DDs increased a lot. It became clear that instead of allowing the balance to go from debit at the end of winter to credit at the end of summer, EON were building up the credit to a level where the balance never went into debit.

I questioned this, and in the end did get a rep to confirm that this was a deliberate change in policy.

However, I think most suppliers take the same attitude to monthly DDs now. There is probably no benefit in opting out and paying quarterly however as you would lose the discount the supplier gives you for paying by DD, and putting the money into savings wouldn't make you very much at all given current interest rates. And finally you might find that the best plans are not available to you.

brewerdave

I've actually experienced the opposite from EON! I'm ~ £115 in credit on the last bill (early November) but EON have written and decreased my DD by £25 per month to £87 !This will balance out to zero by Summer next year but if its a cold winter again I'll almost certainly be in debit by Feb's bill.
The strange thing is that I was assured by the EON rep on here that my DD would not be reviewed until Spring 2011 - so have they changed policy (again) ??

DirectDebacle

Colin_London wrote: »

The EON Direct Debit policy can be downloaded here:

http://www.eonenergy.com/NR/rdonlyres/143C45C7-D919-42AF-8677-D05B91EED4F4/0/DD_Policy_web1.pdf?

Having read their policy it is clear where problems for some customers will arise.

A customer decides to switch and EON come out top on the comparison sites. Their known usage gives a DD of £100 per month.
This is a good deal for the customer who is already on a knifedge budget and the £10 p.m. saving is a lot to them.

The switch is completed in September and the first DD of £150 is taken in October. The suprised customer is told that their anniversary date has been set in April and in order to achieve the zero balance by that time £150 is required for the next 6 months. This can cause real problems for the customer. EON may or may not be reasonable enough to adjust the DD.

The point is this policy will not be revealed by using a comparison site. It is unlikely that the average customer, having clicked the 'switch button' will seek out the DD policy document on EON's website before signing up.

IMO such a policy has nothing to do with the principles of the DD scheme. It ia totally different payment method and should be described as what it is. It is an advanced payment plan which must be at all times in credit. Such plans are of great benefit to suppliers and should be incentivised to a much greater level than a DD discount.

The DD discount was purportedly given to reflect savings for the suppliers over qtrly bills in arrears. If accounts are now permanently in credit at the end of each month that gives the energy suppliers £m's in rolling credit bankrolled by customers.

Customers should be given the choice of paying by DD or signing up to an advanced payment plan.

It is IMO quite disingenuous to use the DD scheme as a payment plan it was never intended to be.

The suppliers are apparently once again bending the rules and taking advantage of weak regulation.

Former_E.ON_Company_Representative:_Malc

gocat wrote: »

Just got a letter saying EON plan to raise my DD from £75per month to £90 from the end of this month.
Just had my last quartely bill last week and balance at last bill is £140 credit. So why the DD price rise?
Anyone else experienced this?

Hi gocat

Already some excellent advice on here. Thought I'd just confirm our policy of aiming for zero balances on accounts by the time of the annual Direct Debit review in the spring.

To help achieve this, accounts are reviewed after each quarterly bill. If, based on previous usage, it is felt there will be a shortfall/surplus; the monthly figure will be adjusted accordingly.

As you've just had your latest quarterly bill, I suspect your Direct Debit has been increased because, as macman says, it may be there is insufficient credit to cover what we expect you to use before next spring.

However, you're doing the right thing in asking for an explanation.

Hope this is useful gocat. Give me a shout if you need any more info as will be happy to help.

Malc

Former_E.ON_Company_Representative:_Malc

brewerdave wrote: »

I've actually experienced the opposite from EON! I'm ~ £115 in credit on the last bill (early November) but EON have written and decreased my DD by £25 per month to £87 !This will balance out to zero by Summer next year but if its a cold winter again I'll almost certainly be in debit by Feb's bill.
The strange thing is that I was assured by the EON rep on here that my DD would not be reviewed until Spring 2011 - so have they changed policy (again) ??

Hi brewerdave

There haven't been any changes to our Direct Debit policy recently. Annual reviews are still done in the spring. The aim is for a zero balance at this point.

To help achieve this, accounts are reviewed after each quarterly bill and, if necessary, adjustments made to the monthly payments.

I'm sorry if I or my colleagues have given a different impression elsewhere. If you let me know the thread in question, I'll see about altering it accordingly.

Hope this clarifies our policy brewerdave. As above, let me know if I can help further.

Malc

gocat

Just had someone round to read my meters this afternoon, but I only gave them reading about 3 weeks ago just before I got my quartely bill. Dont they believe me or something :mad:

Have sent two emails to EON via their contact us form asking them to explain why they put my DD up when I've been in credit all year round, and still no reply from them

Pete_the_trucker

Had this a number of times with EON & had over £200 credit. After a great deal of badgering we got a refund then switched!!!

dogshome

Hi gocat - As posted by others, this demand for increased D/D levels is created by "computer", but even then it's odd if you have been in credit on every bill issued during the past 12 months - Like wise you have upgraded your insulation and the computer should have recognised that in the reduction of season to season billing.

Go over the last years bills, add up the Elec & Gas consumption in Kwh and apply them to your current tariff to see what your annual cost is. ( It's likely that the bills won't cover 365 days, so use the daily consumption on the last bill to adjust your figures up or down to 365 days ), then use the figure to calculate you D/D level

WRITE to E.on with your figures and advise that if they have some other formula which justifies a different D/D level, you want to see it in writing