EON's rubbish computer ....

deshepherd

DirectDebacle wrote: »

Is Eon policy of zero spring balance part of the T & C's of supply in respect of tariffs paid by DD ?

I've a feeling that this is due to instructions from Ofgem to ensure that customers are not allowed to build up a negative balance on their account ... think this in turn was due to Ofgem wanting to remove a potential block to people switching utility providers due to exisitng provider veto-ing change due to an outstanding balance. If you are going to combine an attempt to have regular monthly payments with no negative balances then you'll inevitably end up with a zero balance in spring requirement along with pre-emptive DD increases if usage appears to be increasing.

dshart

deshepherd wrote: »

I've a feeling that this is due to instructions from Ofgem to ensure that customers are not allowed to build up a negative balance on their account ... think this in turn was due to Ofgem wanting to remove a potential block to people switching utility providers due to exisitng provider veto-ing change due to an outstanding balance. If you are going to combine an attempt to have regular monthly payments with no negative balances then you'll inevitably end up with a zero balance in spring requirement along with pre-emptive DD increases if usage appears to be increasing.

With such a system there is no point in setting up a direct debit based on your annual usage, you may as well just have monthly readings and pay your bill each month for whatever you have used.

The whole point of an annual system is that it helps you budget better by averaging out your payments over they year and this is how they advertise the system.

With an annual review in late spring the average consumer should have built up credit on their account to see them through the winter and any shortfall should be made up with the last few remaining payments in spring when consumption starts to drop again before their next review.

A system where your account must always be in credit is only beneficial for the supplier as the customer is losing out on interest that money could make elsewhere.

Checking back through my EON bills for the last couple of years only once was my account close to zero and that was when I demanded a refund just before the bill was issued. The refund was for about £300 and at my next bill I was about £6 in credit. Every other time my account has been at least £200 in credit no matter what time of the year.

They should make it clear if they operate a system where they want the account always in credit and not tell us lies about averaging usage through the year.

backfoot

E.ON_Company_Representative:_Helena wrote: »

I can confirm that our policy does not form part of a customers Terms and Conditions and we cannot see that there are specific licence conditions that mean that our policy must form part of them.


Helena

Operating a system which does not create a DD of a regular fixed amount based on the latest information would be caught by SLC 27.15.

27.15 Save where a clear and express Principal Term of the relevant Domestic Supply Contract provides otherwise, the licensee must take all reasonable steps to ensure that the fixed amount of the regular direct debit payment is based on the best and most current information available (or which reasonably ought to be available) to the licensee, including information as to the quantity of electricity which the licensee reasonably estimates has been or will be supplied under the relevant Domestic Supply Contract.

If I join on a specific date, say 1st December then the best and most current information would be an estimate of a 12 month point going forward. Not four months or 16 months or any other period.Not any seasonal weighting or anything else.

As there is no clear and express Principal Term saying otherwise, then Eon are caught and bound by 27.15.

It is frankly absurd to think any other interpretation could be made from this.

DirectDebacle

Helena,

Thank you for the response.

The SLC refers to all DD arrangements and cannot possibly anticipate the various plans suppliers may devise. Therefore no specific 'policy' is mentioned.

The SLC does require that where payment for the charges for energy are made by DD then the supplier must explain to the customer in clear, plain and intelligble language the basis upon which the DD amount has been determined. Therein lies the problem.

Some customers simply do not understand how your policy works.

As early as Feb 2010 (possibly before that) it has been discussed on MSE. So it isn't new.

I cannot comment on how you explain to customers how your DD scheme works as I have not seen any of the literature that you send them.

I certainly think your website could be made clearer. Particularly this: http://www.eonenergy.com/directdebit.htm#how

An explanation of your policy and how it differed to the DD of 12 even monthly payments would be helpful, particularly if there were comparison tables showing the difference in payments at different joining dates of the year.

The information should be easy to find and access. On a switching site for example, it should be seen together with the other information if the 'more info' button is clicked.( Probably put some customers off from switching to Eon though.)

The energy market is supposed to be about choice (and other things). Maybe you should turn your 'policy' into an option and offer it as an incentivised alternative to the 'default' DD scheme, not as a forced replacement.

If a customer does not accept your policy and insists on an annual review and DD paid over 12 months based on their start date, what is Eons policy on dealing with that?

E.ON_Company_Representative:_Helena

We do send out information explaining the Direct Debit arrangement details for each customer when we set them up, along with the Direct Debit guarantee.

This is also online for customers wanting DD info and clearly explains that "Your Direct Debit agreement is designed to bring your account to a zero balance in the spring of each year" and "We check each time a bill is produced to make sure that your payments are on target to achieve a zero balance. If a change is required, up or down, then we will let you know at least 7 working days before any change occurs."

http://www.eonenergy.com/FAQ/Paying-By-Direct-Debit/Direct-Debit-Payment-Calculation.htm

If a customer doesn't want our Direct Debit agreement, then we offer a number of alternative payment arrangements they can choose.

The Direct Debit options are; the monthly Direct Debit as we calculate it, or the variable Direct Debit that collects the full balance 14 days after the bill.

As for switching sites, they choose what they display, some sites show more information than others.

Clearly we believe we are within the interpretation of supply license conditions and clearly they can be interpreted in different ways. Whilst I'm happy to help explain the DD system, I'm not going to attempt to justify the regulations or our interpretation of them.

Helena

backfoot

It is clear that Eon's policy of zero spring balance is not contained or explained in their Terms and Conditions. They therefore cannot enforce it.

If a customer is unhappy with the impact of this policy and Eon refuse to compromise or take you off the Scheme, please complain formally and take the case to the Energy Ombudsman. I would use SLC 27 to support your case along with 'normal' expectation of how a DD scheme is usually managed.

I personally would not enter into such a payment plan. I would totally dispute Eon's claims that they have responded to customer feedback by introducing it. I can see no advantage to the customer whatsoever.

This arrangement is much more complex than 'normal' DD payment schemes, to the extent that Eon's own Representatives,were not able to illustrate how the payments would operate, with perhaps the simplest of all examples. i.e.an annual bill of £1200.

Consequently,if anyone asks my recommendation on a Supplier I would not be able to support Eon due to this and also their 'final bill' policy of disallowing discounts for no good reason.

Both issues are detrimental financial and customer service policies.:(

backfoot

I just rang Eon for a typical quote to join Online Saver 10.

Supplied precise consumption figures. Was given a quote which exactly matched that given by USwitch.:j

Annual amount to the penny. Divided this by twelve to get monthly amount.

I asked Eon what my monthly payment would be for each supply.

It matched exactly the annual amount divided by twelve.

I asked if this would change and was told it was totally fixed unless there was a price change or my consumption level changed.

Try it for yourself.:)

Now tell me if you think this fits in with the subsequent amendments which will occur, due to the zero spring balance policy. No mention whatsoever was made of it.:(

Mr_K

Although I started this thread off as 'Eon's rubbish computer', just thought I'd say overall I'm quite happy with EON. Save Online 9 seems like a good deal at the moment, although doubtless they'll try and increase the tariff when the weather gets colder....

Their 'computer' certainly does over-inflate DD's (yes, I have read their DD policy, not convinced !). However, in my experience, contact a human being and they seem quite happy to set it at a level that you're happy with. If you're in debit that might be more of a problem but it is possible with EON to make extra lump sum payments to avoid your DD going up. I did this during last year's severe winter. It's possible to make the these lump sum payments either online or by ringing up.

SandC

Yes, my DD was £49, then after the spring review it was increased to £67 despite a small credit - this to cover price increases I supposed. The last time I paid £49 was in June and I have paid the £67 for July, Aug and September.

I put a reading in as requested by the chap who left the card on around 16th September. Despite this, I received an estimated bill the other day (almost one month later). And surprise surprise my DD is now going up to £75. On checking their estimations they reckon I will use exactly the same in both gas and electric as I did for the previous 12 months.

So just how much of a price hike has there been, will there be? Oh yes and I have a current credit of over £89. They reckon I will spend around £880 for the year, despite using exactly the same energy, yet the previous year I spent less than £580.

Can someone clarify the price increases before I ring them to reduce the DDs again?

DirectDebacle

backfoot wrote: »

I just rang Eon for a typical quote to join Online Saver 10.

Supplied precise consumption figures. Was given a quote which exactly matched that given by USwitch.:j

Annual amount to the penny. Divided this by twelve to get monthly amount.

I asked Eon what my monthly payment would be for each supply.

It matched exactly the annual amount divided by twelve.

I asked if this would change and was told it was totally fixed unless there was a price change or my consumption level changed.

Try it for yourself.:)

Now tell me if you think this fits in with the subsequent amendments which will occur, due to the zero spring balance policy. No mention whatsoever was made of it.:(

Must be your unlucky day. Obviously your call was dealt with by the only Eon CSA who doesn't know how to calculate DD payments according to Eon policy.

Email their details to an Eon rep who can set the wheels in motion for further training.

Good thing they send letters fully explaining DD payments before anyone signs up.:D