Ovo - the mystery of the direct debit calculation

Fairzo

Can anyone who has been with Ovo throughout a 12 month contract advise whether the monthly direct debit has been calculated to achieve a zero balance at the end of the contract period? Ovo don't seem to want to tell me.

I switched to Ovo in October last year and started on a monthly DD of £150. I knew I would build a credit balance but thought it was reasonable as it was the start of the winter period and Ovo keep accounts in credit. I also assumed that it would be recalculated in Spring to return to zero or thereabouts by next October.

In mid March I had a credit balance in excess of £200 and applied online to reduce the DD to £50. Received a reply to say there was not enough credit and it would be reduced to £100. Disputed that and it has been reduced to £80.

In my view my anticipated consumption means that I will be be left with a significant balance at the end of the contract but my requests for Ovo to set out the policy / practice for DD calculations have been met with a stony silence.

Any thoughts please?

Cardew

Have you written to them and asked?

Most firms, as you state, try to achieve a zero balance by Spring.

KimYeovil

So you have used £117 per month over the first six months.
Assume you use a third of that at most over summer - £40 per month.

6 * 117 + 6 * 40 + 6 * 117 = 1644
1644 / 18 = £91

With the inevitable price increases £100 seemed a fair enough suggestion. £80 is also reasonable (but may be low and is unlikely to last the next twelve months without a further adjustment up.)

Fairzo

Cardew wrote: »

Have you written to them and asked?

Most firms, as you state, try to achieve a zero balance by Spring.

I have written as in emailed which to my mind is the same thing.

I'm not trying to achieve a zero balance in the Spring. The contract is for 12 months ending 30 September this year so I think the zero balance should be related to that.

Fairzo

KimYeovil wrote: »

So you have used £117 per month over the first six months.
Assume you use a third of that at most over summer - £40 per month.

6 * 117 + 6 * 40 + 6 * 117 = 1644
1644 / 18 = £91

With the inevitable price increases £100 seemed a fair enough suggestion. £80 is also reasonable (but may be low and is unlikely to last the next twelve months without a further adjustment up.)

I think your calculations assume another 12 months from now - I only have around 5 months to go out of a 12 month contract, i.e ending 30 September 2011. I will have a credit balance of £262 when the May direct debit is paid and I would think that should just about see me through to the end of September without paying any more?

KimYeovil

Yes, but there will be no presumption you are staying for only twelve months. The standard zero point for most suppliers is, as already mentioned, March/April.

Fairzo

KimYeovil wrote: »

Yes, but there will be no presumption you are staying for only twelve months. The standard zero point for most suppliers is, as already mentioned, March/April.

Oh right, that's really the question that Ovo seem reluctant to answer. Thanks.

sofa-spud

Fairzo wrote: »

Oh right, that's really the question that Ovo seem reluctant to answer. Thanks.

As I found out when in the process of switching to them. I find they tend to reply in generalities rather than specifics until pinned down.

I was trying to get them to confirm how they determined the DD amount. I finally got an email confirmation that they recalculate the DD amount in April & Oct (for me who joined in Oct). This was after I reminded them that this was stated on their web site. The amount is based on their assumption of using 25% more than average during the 'winter' (they never stated which months inc), so your annual expected consumption cost (AEC)/12 then for 'winter' months add 25%, for summer deduct 25%. I ended by giving them my calculations including the amount my DD should fall to & they never refuted these
This is what they told me anyway...
But then this is the 7th monthly payment they have just taken and it has not been reduced, so is currently 'under discussion' with them

trinidadone

I have been with OVO for over twelve months. Firstly, when I completed the first 12 months, I was in credit. Also, are you aware you are paid 3% incredit interest from OVO on any monies you are in credit with.

Fairzo

Yes, I am aware of the 3% "interest" but I would rather decide if my money was in my hand, in my bank or held onto by Ovo.

Since the contract is for 12 months then personally I think that the monthly payments should be calculated so that the balance is zero at the end of that 12 months (which was the impression I was given when switching to Ovo). If I decide to stay with the company for another fixed contract then the monthly payments can be calculated afresh. Seems simple enough to me but, judging by the responses from Ovo, that appears to be where I'm going wrong.

trinidadone

I dont wish to be seen to take sides, but please look at the view point of OVO. they cant possible predict a zero balance after 12 months. Last winter was the worse on record, OVO could not of told you that. The weather meant you may of used more gas for the central heating.

I am with OVO and peranlly I dont care if I build up some reseves (money on my account) as I know I will be using the central heating from November, right the way through to March.

sorry if I dont sound sympathetic, I am. I guess you need to be aware, OVO is there to also make money. I think someone above mentioned you should of stuck with £100.00 a month, as £80.00 might of been too low. As we dont really use central heating for six months of the year, the worse would happon is you will run £100 in credit, payed at 3% incredit interest!!