Big hikes in direct debit payments - EON

BenNevis

DirectDebacle wrote: »

Difficult as you have now become incoherent. Nonsense. If you’re down this sort of daft remark I pity you. However you still manage to aim snide remarks at other posters. After all of the abusive stuff you’ve thrown at me I don’t know how you’ve got the cheek. Your abusive posts on this and the npower thread are for all to see. If you’d just answered jalexa’s question properly instead of being sarcastic and if you’d answered properly when I asked my question instead of using bullyboy tactics you could’ve saved us all a lot of time and trouble.

Can we now get on with this thread without further insults?

Roughly speaking SLC 27.14 says the energy companies must give their customers a full explanation of their calculations. SLC 27.15 refers to those calculations but fails to provide enough detail & SLC 27.16 deals with making the companies give back any surplus balance back to the customer.

Sections 27.14 & 27.16 are clear & well worded IMO but S27.15 lets the side down badly because it’s not clear if the energy companies should stick to the trad calculations based on a 12 month period of if they can use any method they’d like to in spite of the financial harm it causes to lots of customers.

FWIW here’s a few reasons why I think S27.15 despite its slack wording should be operated by Ofgem to make energy companies stick to the 12 month basis.

· Direct debit monthly payments were designed to spread the load over a 12 month cycle

· It’s been this way for so long that it’s an established practice. This is confirmed by Consumer Focus.

· Customers know & understand this method.

· When customers switch companies they’d expect the same 12 month method to be used in calculating their new monthly payments.

· Letting companies use different methods will make switching even more complicated for the public when deciding what’s best for them.

· SLC 27.15 begins by saying that an energy company can opt out of this section if it includes a Principal Term in its customer contract. Those words wouldn’t be necessary unless Ofgem intended S27.15 to preserve the established 12 monthly method as the standard method & that any company wishing to chose another method can only do so if it’s a Principal Term in the customer’s contract that says it can do this.

· So IMO unless an energy company has a Principal Term in its customers contract then it’s in breach of SLC 27.15 if it departs from the established 12 month method.

· I don’t know the exact definition of a Principal Term but I’m more or less certain that it doesn’t mean a contract term hidden in the small print that just opts out of SLC 27.15.

· I’m sure it means that a Principal Term would need to be worded very…very clearly & not just hidden in jargon.

· If you look at it in this way SLC 27.15 makes perfect sense & if you look at it in any other way it means next to nothing.

· If SLC 27.15 is ambiguous it should be interpreted in favour of the public not the energy companies & this was confirmed to me by Direct Debacle in a recent post as being a definite practice in the industry.

· The companies claim that spring aligning helps customers. No it doesn’t. It doesn’t make the bill any cheaper but what it does do is muck about with peoples monthly outgoings to suit the companies. For the badly affected customers this causes serious financial hardship & can put them into debt somewhere else. OK the energy companies might pod back any surplus cash in the spring but it’s a bit late for some customers by then. No company should have the right to take too much off a customer & hold it before giving it back in the spring unless SLC 27.15 actually says this (which it doesn’t) or there’s a Principal Term in the customer’s contract that gives it the right.

· I think the energy companies know they’re in a weak position on this & they’re hoping Ofgem will carry on looking the other way. SLC 27.15 doesn’t give the companies any help for what they’re doing unless they’ve included a Principal Term as mentioned & that’s why all these method changes are being done while giving out as little info as poss to the public. If the energy companies are in a weak position so is Ofgem.

I suppose there’s plenty more arguments that support the above but I’m fresh out of ideas.

jalexa

BenNevis wrote: »

If the energy companies are in a weak position so is Ofgem.

I've kept out of this exchange, however I will add one comment. Earlier I opined that the Eon behaviour on this matter was humiliating Ofgem, however that did not result in common cause. Which is what this subject needs.

DirectDebacle

My view, formed on mainly anecdotal evidence, of Eons zero spring balance policy is this.

They first introduced it in April 2009. The introduction of SLC27 in January 2010 presented them with a problem. Up until then Eon had not explained their policy to customers and wanted to continue that practice. They couldn't find a way round it so simply ignored it.

SLC 14. requires a clear explanation to customers of the basis upon which DD payments are fixed but doesn't specify what type of information should be used.

SLC 15 does. It specifies some particular information which must be included in the basis upon which DD payments are explained as per SLC 14. The information is not limited to this basic requirement.

As their zero spring balance policy is an integral part of how they calculate DD payments it would have to be part of the explanation SLC 14 requires.

After much badgering by backfoot and I an Eon rep came up with this:

"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."

Which is true. But nevertheless, in my view, SLC 27 still requires them to explain it to customers.

I believe Eon would have difficulty in claiming that a policy requiring an unusual method of calculating DD payments need not be included in their explanation to customers. But I am not a lawyer.

I don't see SLC 27.15 as a get out clause for Eon. It appears to back them further into a corner.

That is my opinion. The only opinion that will matter, is that of Ofgems, if they ever get round to examining it.

jalexa

DirectDebacle wrote: »

That is my opinion. The only opinion that will matter, is that of Ofgems, if they ever get round to examining it.

I respect your opinion and (in the main) agree. I do not however respect regulatory failure in UK plc, which (in my opinion) is being displayed on this issue by Ofgem.

Considering all the posts, I cannot say whether the Eon calculations would satisfy my personal scrutiny because the data is incomplete, however whether the payments are right or wrong the "sudden excessive hike" must represent intolerable pressure on household budgets. That cannot be reasonable and requires a "speedy" intervention from the relevant Minister.:D

I also note at least three occasions where the normally engaging Eon web mons have failed or declined to respond to specific pointed questions:(. I conclude that the questions must have been "on to something" and the policy is vulnerable to a focussed challenge.

DirectDebacle

I agree on that. Part of the problem is the way Ofgem is set up. It isn't customer friendly and will not usually receive complaints from individuals. Complaints have to be referred to them through other organisations (often Consumer Focus). This takes time as a significant amount of complaints have to be made on one issue before they are passed on to the regulator.

As you are aware I contacted C.F. and they told me they were unaware of the problem. You expressed surprise at this and I found it odd also. I don't know what system C.F. use for collating complaints but I would have thought they would have had a fair few well before now. Hopefully they will soon get something off to Ofgem.

I shudder to think what it will be like if C.F. are dismantled and their work farmed out to CAB and Trading Standards.

backfoot

Eon's policy of cash flow manipulation was not on the radar for most customers until the massive price rises.

It reveals itself significantly now and I can't see any other outcome than our representations to be supported by the Regulator.

It is pretty shameful of Eon to have bluffed it out for so long but that's what the suppliers are prone to do, despite the overwhelming evidence.

DirectDebacle

Echoes of npower 'sculpting' here. I hope Ofgem (if they investigate) do a better job than that shambles.

meggsy

DirectDebacle wrote: »

Echoes of npower 'sculpting' here. I hope Ofgem (if they investigate) do a better job than that shambles.

It's a shame that CF don't post on here although they have registered

https://forums.moneysavingexpert.com/discussion/781221

and hello to Anne3333

dshart

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.

EON dont work on you having a zero credit balance in the spring, they work by reseting your account to zero at the spring review. They pay you back what you are in credit and then proceed immediately to build up a credit again, first by dividing your annual usage by 12 and setting your payments at this level so you get into credit over the summer, then before winter they increase your dd again to cover additional usage over winter. This all leaves you in credit again in spring when they do an annual review and repay your credit and return your account to zero.

jalexa

dshart wrote: »

EON dont work on you having a zero credit balance in the spring...

Oh yes they do! Must be that time of year again.

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