Direct Debits - THE BIG CON

DorsetDave2

I am with EON and up to now have been paying £100 per month by DD. I recently changed to their fixed rate till Autumn 2013. They then told me they wanted to change my DD to a whopping £168 per month.

Now I know Gas & Electricity prices have gone up substantially and a fixed rate is more expensive at the beginning. But I thought this was extortionate so I rang them for an explanation. They had already told me my estimated combined bill for the coming year would be £1359. Obviously 12 x £168 is £2016. Furthermore at present I am in credit to the tune of £144 - In fact in the past they have sent me a cheque as I paid too much. When I rang and explained all this to EON they werent very forthcoming and tried to 'blind me with science' but eventually said they would reduce the DD to £128. I said I thought a fair figure was £120 per month. Eventually they agreed this with a review in 3 months time.

One of EON's arguments was that the regulator had told them they musn't put people in Debit. I told them I had never been in Debit with them and my past history showed this. This meant they must be sitting on Millions of pounds of customers money and making a mint out of it. Furthermore telling vulnerable people that their DD was going up 68% (have I got my maths right on this?) would have been very upsetting and a great shock to them.

backfoot

DorsetDave2 wrote: »

One of EON's arguments was that the regulator had told them they musn't put people in Debit. I told them I had never been in Debit with them and my past history showed this. This meant they must be sitting on Millions of pounds of customers money and making a mint out of it. Furthermore telling vulnerable people that their DD was going up 68% (have I got my maths right on this?) would have been very upsetting and a great shock to them.

Another classic example. Would the Eon Reps care to comment on the apparent Ofgem rule?

You can find more about this topic here.

https://forums.moneysavingexpert.com/discussion/3531893=

mvan

Same here with eon, has happened a couple of times, DD increased while account well in credit then after a discussion on the phone (explaining that I am not here to fund eon's bank balance and would like to pay for the energy I use) the DD was returned to the same or with a small increase.

This time was paying 81/month then got a bill, while 95 in credit, with a DD increase to 153! Agreed that they have put prices up but not that much, sent an online complaint and got a confusing answer about increasing this to 200/month with a comment about how they want to avoid customers falling into debt.

Its a total con, these companies are using customer credit to fund their businesses and our problem is that they get away with it as the regulators are a waste of time.

Looks like another session on the phone to try and get them to understand that I have no problem paying what I use but I am not here to fund shareholders....

flyingjock1

Why are EDF changing the DD. Thought the idea of a fixed price deal was you worked out your usage then calculated an appropriate DD then and as long as its constant usage the DD will cover the years usage and by the end of years oir time of annual review youll in theory start the next year with a zero balance. Interesting stunt by EDF!!!

jalexa

DorsetDave2 wrote: »

...They had already told me my estimated combined bill for the coming year would be £1359. Obviously 12 x £168 is £2016...

Just another case of a supplier "copping-out" of the explanation they are required to provide in compliance with SLC27.14

Assuming that the £1359 combined bill for the coming year is post increase and tariff change, i.e. agrees with a Consumer Focus accredited comparison website headline cost for your typical annual consumption, then that has limited relevance to a short year "spring aligned" calculation. If you refer to the Eon winter weighting "Twitter Table" you can see that only the heating fuel (typically gas) displays significant winter weighting. For Eon to substantiate their own "short year" winter calculation to an "annual review" whenever it occurs (and I'm not here debating "spring review"), the individual energy projections need to be considered, i.e provided.

I do not know whether their calculation is correct but in the absence of individual energy projections to the annual review such speculation is irrelevant.

I have asked such a question of Edf by email and the answer has failed the initial 10 day response target and the follow-up 5 day response target. Not to respond is a high risk strategy, but that is another matter.

backfoot

Anyone adversely affected by the Eon 'zero spring balance' policy or indeed other Supplier's policies,please let Consumer Focus have details of your complaint. Consumer Focus and Ofgem are currently looking into this matter.


[EMAIL="contact@consumerfocus.org.uk"]contact@consumerfocus.org.uk[/EMAIL]

DirectDebacle

Having read through the several threads going back to early 2010 on the subject of Eon DD policy two things become evident.

1. Customers surprise and anger at the amount their DD has changed.

2. Eons inconsistent and varied reasons for explaining the change.

From the few facts I have and the anecdotal evidence given I believe some sense can be made of it.

I suspect that from April 2009 (the introduction of the alleged spring zero balance policy) Eon have and are continuing, by means of fraud, attempting to:

1. Gain for themselves market share over their competitors

2. Improve their cash flow by abusing the DD payment scheme.

In order to achieve those goals it would be necessary to mislead customers over the precise mechanism of the DD they were agreeing to.

It appears that there is some evidence to support this. Eon reps have stated that on sign up some customers are told their DD is set at cost of anticipated annual consumption/12 monthly payments.
Which is not, we are told, Eons policy of administering DD. In one example there is allegedly deliberate concealment of Eons DD policy.

The information explaining their DD policy on their web site is, in my view, misleading and does not comply with the requirements set by Ofgem.

It is unlikely that Ofgem would take any action under the Fraud Act. However I believe they would have little difficulty in finding Eon to be in breach of other regulations.

If any customer feels that they were misled by Eon over what their actual DD payment scheme would be, then they should in the first instance complain to Eon and also copy their complaint to Consumer Focus.

If Eon refuse to adjust the DD to a reasonable amount and administer it as the customer was led to believe it would be administered, then a complaint to the Energy Ombudsman would be the next step.

If the customer is forced to switch supplier and as a result there is any loss of discounts or termination fees applied, these should be contested also.

If a contract is entered into and the full terms are not made known to you at the time, and had they been you would not have entered into it, the contract is unenforceable.

happy35

the same has just happened to me, I was paying £86 and had a couple of hundred pounds of credit, the wanted to decrease my dd to £57, I asked them to take £90 so that I could put the heating on when I wanted to over the winter.

I have just provided my meter readings and still have credit but have just been notified that they want to increase my DD to £105, am going to ring them as I think this amount is too much

DirectDebacle

happy35,

If you do get through to Eon would, you mind letting us know their explanation of the conduct of your account and what resolution was agreed?

Thanks.

Kev27

Ive noticed since the latest price increases that e.on have really started milking my direct debit, im a low user and pay £13 a month for Electric and was £46 in credit but since the increase i am now only £16 in Credit and ive hardly been home!! So i left them today and gone with ebico.