The mind boggles!!!

higgs

Just had to share my disbelief. We are over four hundred pounds worth of credit with Scottish Power.

Yesterday we got a letter advising that they will be sending us a check for the excess credit on our account. Fair enough!

However.. the letter also advises that they are increasing our direct debit by twelve pounds a month!!! :think:

We are clearly already paying more than we use, and although I understand winter bills might be higher, I am just astounded!!

However have the last laugh as I had just completed switching companies when we got the letter!!:D

January20

Well, you are putting my little problem in perspective: I am in credit by £47 with npower, and they have put my direct debit up from £50 to £94. I'll be ringing them tomorrow, as my reasoning is that I pay by direct debit so I don't have the nasty surprise of a big bill, not to line npower's pocket with the interest they get from extra payments I don't owe!

Joyful

January20. the problem will be if Npower want you to be at a zero balance in Spring. For this time of year you should have a lot more Credit on your account than £47. To put it in perspective people can easily use £100 per month or more in the winter months if it is as bad as last year.

DirectDebacle

January20 wrote: »

Well, you are putting my little problem in perspective: I am in credit by £47 with npower, and they have put my direct debit up from £50 to £94. I'll be ringing them tomorrow, as my reasoning is that I pay by direct debit so I don't have the nasty surprise of a big bill, not to line npower's pocket with the interest they get from extra payments I don't owe!

The first problem is that npowers explanation of how they administer their DD scheme is almost incomprehensible.

They are required (under the Standard Licence Conditions which apply to all suppliers) to not only inform you of a change to DD payments but also to give a clear explanation as to why and on what basis the changes are being made. Did they supply you with this? If not they are in breach of their licence conditions.

As an example, if a customer joined npower in October last year and the first of the 12 monthly DD was taken the following month, the 12th payment would be made October this year. Assuming the DD was calculated correctly initially, the account should ideally be at zero on the 12th payment. In that case a payment of £50 per month and a credit balance of £47.00 is not too far out. I do not know if your account is similar to that example.

As long as you know your annual usage, cost and date your first, of the 12 monthly, DD was taken, then dividing the annual cost by 12 gives the monthly DD payment. This of course should be changed if, during the 12 month period, there is a change of usage and/or prices.

I suspect you know this already and are well prepared for your phone call. The above is for the information of all readers.

Joyful wrote: »

January20. the problem will be if Npower want you to be at a zero balance in Spring. For this time of year you should have a lot more Credit on your account than £47. To put it in perspective people can easily use £100 per month or more in the winter months if it is as bad as last year.

This is not necessarily correct. It depends upon where in the year the anniversary date (zero balance date) falls.

For some accounts a credit at this time of year is desirable. For others it would not be. To state an account should be in credit because winter is approaching is a myth.

It is often a (misleading) reason given by energy companies to change DD payments, whether or not other reasons exist.

Joyful

Direct Debacle

I only posted what others have said re Spring ( including Official reps from companies). British Gas who I work for indeed do it on the aniversary of the plan being set up so I agree that depending on when it is set up their could be credit or debit on the accounts. It seems that many companies though are wanting a zero balance in spring which to me is not the way a plan should be worked out at all.

DirectDebacle

Thank you for the clarification. I am pleased we agree. Which other companies (apart from Eon) do you belive have a spring zero balance policy?

January20

I have just spoken to npower and clearly we have a difference of belief re why a customer should pay for direct debit. For me, it is so I don't get a huge bill at the end of the winter, or anytime of the year actually, but for npower, it seems that they want the customer to be in credit in the summer to pay for the winter bill. I know I won't use £94 a month in the winter. I didn't last year (and we had a pretty cold winter here too) as by April I was over £200 in credit and I was paying £60 a month. So they missed their spring zero with their calculation of my bills.

I need to give this matter some serious thought. I don't like the fluctuating direct debit every 6 months or so. I need to work out if I would be better off paying my bill in full when it comes in like so many people do. The discount for paying by direct debit is pitiful anyway, and I've been thinking about trying to get a cheaper supplier anyway so this might be the kick in the backside that I need!

DirectDebacle

Be nice if the npower rep put in an appearance and explained how their DD system worked.

spiro

January20 wrote: »

The discount for paying by direct debit is pitiful anyway, and I've been thinking about trying to get a cheaper supplier anyway so this might be the kick in the backside that I need!

It may be pitiful (a few %) but it is a discount you wont get with a pay on bill tariff. Also nearly all of the cheapest tariffs appear to require you to pay by DD so you may also exclude yourself from loads of tariffs.

meggsy

DirectDebacle wrote: »

Thank you for the clarification. I am pleased we agree. Which other companies (apart from Eon) do you belive have a spring zero balance policy?

This from Coop Energy
"Your direct debit will be calculated based on the consumption information we receive when you signed up. This information provides us with your energy details – your Estimated Annual Consumption for electricity (EAC) and Annual Quantity (AQ) for gas. We then apply our unit prices to these figures, add our standing charge and divide this amount into 12 equal payments over the year.

Your monthly direct debit will be taken on the 5th, 15th or 25th of each month, depending which choice you selected when you signed up. We will review your direct debit amount every 6 months because we want to make sure your direct debit is always accurately reflecting your actual consumption. We recommend to all our customers that they check their statements to make sure their meter readings are accurate"

We switched end of August and they have set DD at £145, first payment taken 5th September, so will be in £580 in credit when first bill is due in December.

"If your account is showing a large credit (defined as a cash balance equal to two months direct debit payments), we are very happy to refund this amount back to you if you ask us. We will also review your direct debit level every six months to ensure it is set at the right level. Please be aware that in the Spring and Summer months, you should expect to be in credit because your energy consumption will be lower and your monthly direct debit is at a constant level. Conversely, in the winter months, you would expect not to be in credit. So, we have to take a whole year view when assessing requests for refunds. Once approved, your refund should be in your bank account by the end of the following week"

I'll be keeping an eye on this

http://www.cooperativeenergy.coop/help/faqs/

DirectDebacle

One of the better DD descriptions I have seen. No requirement for a spring zero balance from the Co-Op. Eon and npower should take note.

meggsy your A/C balance in December will depend on usage and so may not be as much as £580.00?

End of February will be about the time of your six monthly review.

Not many suppliers say this,"Conversely, in the winter months, you would expect not to be in credit."

By then you will have paid a total of £870.00. This sounds a lot to me but may be right for your usage pattern.

After your experience with npower, clarity will be a refreshing change for you.;)