Big hikes in direct debit payments - EON

backfoot

It would be helpful for any Eon customers who are or were adversely affected by their 'zero spring balance' policy to let Consumer Focus have details.

In addition, if like me,you consider that the policy effectively reduces competitive choice in the energy market, because the impact is prohibitive on a customer's cash flow,then please also let CF know your view.

To my knowledge,there have been three detailed representations by forum posters to CF. Alongside this, many customers away from this Forum will have complained about the impact without, perhaps, knowing or understanding the complexities.

I have also written, some time ago to OFgem and understand the matter is with one of their Senior people. It is hoped that the two things will be brought together.

I would suggest,you keep it simple explaining the impact and how you are penalised by this policy.

If you were not aware of the full impact when you signed up, also tell CF.

If you have not received a clear and understandable calculation of the change to your DD along with the notification,then also inform CF.

All of these matters are covered by the Standard Licence Condition 27. I personally have no doubt that Eon are currently falling foul of those Conditions and have provided my personal evidence. There is no need for individuals to get involved in the legal arguments but simply to provide facts.

As with the ruling on Termination Fees, imho, Ofgem are likely to find this matter in favour of ordinary customers, who shouldn't be penalised by a policy obviously and solely designed to supplement a Supplier's cash flow.

http://www.consumerfocus.org.uk/contact-us

jalexa

backfoot wrote: »

It would be helpful for any Eon customers who are or were adversely affected by their 'zero spring balance' policy to let Consumer Focus have details.

I don't disagree with any of your post but I'd like to make a slightly different point. What Eon are doing (spring balancing everybody) is identical treatment to any customer who has a natural "spring" anniversary. IMO the fundamental issue is not 'spring balance' per se but "interim review".

Currently there is a "perfect storm" (self-inflicted by Eon) resulting from tariff maturity, tariff increases (as well as any account balance shortfall recovery) being recovered over a "short year" coincident with 80% of annual heating fuel consumption.

I would say that regulation needs to ensure that any increase (for whatever reason) over an accurately established level fixed payment should not be recoverable over a period less than 12 months.

Some of the cases highlighted in this thread also suggest that Eon did not conduct the previous 'annual review' accurately (whether anniversary or aligned). IMO supplier error should be handled seperately from the issue of accurately calculating the correct regular fixed payment. Or to put that another way, a customer should not be penalised for supplier error.

Given regulatory protection against "short-year" recovery, I am not personally set against "spring review" (because I think the fundamental problem is "interim review"). But looking at the only supplier weighting data I have seen posted (the Eon Twitter table), an "April" review is not equitable because correct level payments for the heating fuel leads to an excessive customer balance. A more equitable alignment would be June or July. Given that Consumer Focus mentioned "balancing" in the reply (to you or Meggsy?) I think I need to bring that to their attention.

backfoot

Jalexa,

Good points. :T

Please let CF have your input.

DirectDebacle

BenNevis wrote: »

It’s not unreasonable and I didn’t misinterpret anything as I only copied what you wrote and your words were so definite there’s only one interpretation possible.

There is more than one interpretation. Yours is based on a segment of a post taken entirely out of context.

The context of the thread it is taken from relates to customers not understanding the high DD payments they are being requested to make. The reason appears to be that they were not being given sufficient information as to how the DD payment figure had been arrived at.

Ofgem concluded that the lack of information given by suppliers to customers was a serious concern and introduced SLC 27.

SLC 27 is all about explaining DD payments to customers.

The post you quote was in that context. The type of action I was referring to was of suppliers not providing information as required by SLC 27 and the example in that quote was from a customer of npower.

I see nothing wrong with it.

DirectDebacle

Have you looked at 2.83 in the March 2009 consultation document published by Ofgem (The link may not work). It deals with refunding credits. Ofgem note that all suppliers aim for a zero credit balance in the spring and remark that a reassessment, as done by Eon, is good practice to ensure there is no credit balance at the end of winter. I suspect Eon have taken this as a green light to implement their policy.

Of course a zero credit balance in the spring is very different to the policy pursued by Eon.

I have already brought this to the attention of C.F.

nado-gr4

tweets wrote: »

Thought i would come on here and put in a good word for EON just got my latest bill and my DD gone down from £61 to £33 thats for both gas electric so i am well chuffed. I was in credit by over nearly £150 on my last bill.

BE CAREFUL as thats what happened to me, my duel fuel debit came down 2months ago from £63 to £52 then last week i got a letter stating they were changing my DD to £93 a month which is a £39 a month rise....SHOCKING that they can do this because if they had no changed it in the first place everything would be ok..

My sister phoned eon and they agreed to drop it to £76 a month which I still thing is shocking and just ripping me off...

Why are they aloud to do this when the person i spoke to said that I'm locked into a contract till 2013 and I'm safeguarded against price rises and i will not be charged any more till after 2013..

I asked at the time why my dd charge was going down and was told thats what they have worked it out to be over the year...

THESE PEOPLE meaning the Utilities company's etc are just doing what they want and there's nothing we can do about it.....

THIS WAS IN THE PAPER
EON's profit in 9months £257million

SSE profit in 6months 287million

as usual its us Joe public that pays for the GREEDY SHAREHOLDERS..

need i say more.. except

a revolution now and again is a good thing...:mad:

BenNevis

Well I’m glad to see an absence of abusive words etc and that we can perhaps proceed on logic and not rudeness.

DirectDebacle wrote: »

There is more than one interpretation. Yours is based on a segment of a post taken entirely out of context. Come on now...don’t bring out that oldie. That’s what politicians always say when they’ve said something they regret.

BTW you know that the subject of the npower thread is exactly the same as this one and let’s face it there’s only one meaning of that quote when you wrote

“As an example a customer entering into a DSC which is for 12 months in October and requires monthly DD payments would not expect the DD payments to be set at a level to achieve a zero balance by the end of March.

This would be in breach of SLC 27.”

So don’t say these words mean something else...please.

The context of the thread it is taken from relates to customers not understanding the high DD payments they are being requested to make. The reason appears to be that they were not being given sufficient information as to how the DD payment figure had been arrived at. Not so. The only difference between this thread and the other is the name of the energy company and so the context is the same as here. You wrote those words in reply to jalexa when hammering his suggestion that SLC 27 doesn’t help stop companies calculating payments of periods of less than 12 months.

Ofgem concluded that the lack of information given by suppliers to customers was a serious concern and introduced SLC 27. Yes… SLC 27.14 does this but it’s a bit wide to say that the whole of SLC 27 is for this.

SLC 27 is all about explaining DD payments to customers. No.…Only SLC 27.14 deals with it.

The post you quote was in that context. Not so as I said above both threads run on the same subject. The type of action I was referring to was of suppliers not providing information as required by SLC 27 and the example in that quote was from a customer of npower. That’s not what your words quoted say at all. You’re very good with words and if you’d meant your words to have a different meaning as to what they do say I’m sure you’d have worded it differently.

I see nothing wrong with it. Only that what you wrote is wrong.

In spite of backfoot’s attempts to discredit me I came round to his thinking that the energy companies have moved the goal posts by ignoring the established practice of calculating fixed monthly payments for 12 months consumption and to calculate so as to spring align even if that’s caused financial difficulty to customers.

On the npower thread backfoot wrote in a reply to jalexa as follows and it applies as much to this thread since the subject is the same.

backfoot wrote: »

We have a divide of opinion as to whether there is a Breach of SLC27.Ben and yourself are looking for specific words which rule out such a practice/s. I don't think the SLC27 is prescriptive enough but I do believe it provides sufficient basis to use it to challenge many of the practices we are seeing. Until someone actually does,we don't really know.

I agree with this and that’s why I said in my previous post that the more reasons we can come up with that hold up the idea that the only way that SLC 27.15 can be sensibly interpreted is that all such calculations should be based on 12 months consumption etc and no less the better it will be. Lets face it this is what all the customers posting on these threads were expecting as it’s what the idea of DD payments was all about.

BenNevis

DirectDebacle wrote: »

Have you looked at 2.83 in the March 2009 consultation document published by Ofgem (The link may not work). It deals with refunding credits. Ofgem note that all suppliers aim for a zero credit balance in the spring and remark that a reassessment, as done by Eon, is good practice to ensure there is no credit balance at the end of winter. I suspect Eon have taken this as a green light to implement their policy.

Of course a zero credit balance in the spring is very different to the policy pursued by Eon.

I have already brought this to the attention of C.F.

I’ve looked at the consultation document but I can’t say I’ve read it all and it was weeks ago but thanks for the link.

This new approach by the energy companies must improve their cash flow maybe by £millions and if one company does it the others have to so as to keep their costs in line. They spin it as being good for the public and Ofgem has been dumb enough to fall for it. Customers aren’t kids and don’t need someone to decide for them that they’ll need a credit balance in the spring. Ofgem is allowing those companies to make more money at the suffering of lots of their customers.

While Ofgem think it’s good practice to have credit balances at fixed times I think Ofgem hasn’t looked into this properly or maybe it’s turned a blind eye but either way I don’t care what Ofgem says in its consultation document the pressure with a bit of luck will build up to make Ofgem do its job correctly.

I’m glad you’ve brought it to the attention of CF and you’ll remember that’s what I posted I felt you should do.

DirectDebacle

Well I’m glad to see an absence of abusive words etc and that we can perhaps proceed on logic and not rudeness.

Difficult as you have now become incoherent. However you still manage to aim snide remarks at other posters.

I’m glad you’ve brought it to the attention of CF and you’ll remember that’s what I posted I felt you should do.

Unnecessary suggestion as post #15 on this thread would have told you.

jalexa

Anybody yet had a written explanation of a calculation for a "sudden excessive DD hike", in particular whether the "alignment" month is April or May?