Big hikes in direct debit payments - EON

DirectDebacle

dshart wrote: »

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.

I know. That was the point of my post.

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

Airmike23

Thing that most people finding very frustrating is the minions at eon that joe public get thru to have had it hammered in to them bt management,the policy of £0 bal by 1-4-XX, of course if the reallignment results in credit, the bill a customer gets after that date, the surplus will automatically be refunded. Eon will refund credit at this time and will lower direct debits at this time of year, what they wont do is allow for a refund and dd drop, that will potentially mean a debit after winter consumption. I appreciate when people see they are £200 in cr and Eon are asking for £30 more on the dd it is tough to take. What has affected many folk this year that between 1-7-11 and 31-10-11 Fix Online 8, Save Online 2and 3 all ended that had massive discounts on the unit rate, and if they did not switch to an alternater plan, and let their tariff and end of cheap one default to Energy Online the mdd increase is based on the new rates, on increased unit rate costs as of 13-9-11, with about 15% less discount than their previous tariff, that is why at least 50-60% of folks I've dealt with have experienced such large mdd increases, the current range of products are just not as cheap as what was around a year ago, so if the customers usage has not dropeed by 20% + in the last year, the only option to ensure they are not massively behind after winter 2011/12 is to increase the mdd, sometimes it does seem, where did this come from this increase, the letter an eon customer gets re the dd incr does explain, but v long and tedious and most folk don't bother with it. I think there should be circumstances taken into acc when a cust calls in saying they can't afford the incr, but a lot of the time people have very unrealistic ideas about what their actual cost is against what they feel they should be paying, eg I spoke to a lady, just off save Online 3, had been paying £88 a month since Nov 2010, smal cr on acc as of end of Oct 2011 statement, because saveol3 had ended and now on energy online her annual cost was £1392 or £116 a month, she could not get her head around this, after asking her to go away and have a look on comp sites she saw what I was talking about Save Online 11 allowed her to drop mdd to £104, but she was trying to suggest she should only pay £90 a month which is not going to do it, that's for me is the biggest thing, getting customers to understand usage and the cost of, wouldn't solve that we don't like mdd increases, but if they can be shown more effectively why it is, might be an easier sell.

jalexa

Airmike23 wrote: »

...the letter an eon customer gets re the dd incr does explain, but v long and tedious...

Why not post a template letter and let us all be the judge?

Mrs_Arcanum

dshart wrote: »

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, Sorry, this not what happened to me! 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.

I was in credit at my spring review by a small amount (bearing in mind I chose a higher monthly payment than E-on did). I did not get a refund and rather than keep my payments at a level which would ensure I built up a very good credit over the summer they reduced them by over 30% (a sum I also disagreed with so paid more).

If they cannot get my usage right "at the annual reveiw" with wildly OTT increases & decreases is it any wonder people are complaining. :eek:

backfoot

Airmike23 wrote: »

the letter an eon customer gets re the dd incr does explain, but v long and tedious and most folk don't bother with it.

Does it contain paragraphs,plain english and is easy to read as required by SLC27?

If not, could you suggest an improvement?

DirectDebacle

jalexa wrote: »

Why not post a template letter and let us all be the judge?

I have been asking for a sample of the letter, over the course of these threads, that is first sent on sign up. Even the Eon rep failed to do this but produced a chart instead:(

It would be useful to compare the two. Sign up letter and review letter.

Mrs_Arcanum

DirectDebacle wrote: »

I have been asking for a sample of the letter, over the course of these threads, that is first sent on sign up. Even the Eon rep failed to do this but produced a chart instead:(

It would be useful to compare the two. Sign up letter and review letter.

This was mine

DirectDebacle

Thank you for this interesting post.

Airmike23 wrote: »

Thing that most people finding very frustrating is the minions at eon that joe public get thru to have had it hammered in to them bt management,the policy of £0 bal by 1-4-XX, of course if the reallignment results in credit, the bill a customer gets after that date, the surplus will automatically be refunded. Eon will refund credit at this time and will lower direct debits at this time of year, what they wont do is allow for a refund and dd drop, that will potentially mean a debit after winter consumption. I appreciate when people see they are £200 in cr and Eon are asking for £30 more on the dd it is tough to take. What has affected many folk this year that between 1-7-11 and 31-10-11 Fix Online 8, Save Online 2and 3 all ended that had massive discounts on the unit rate, and if they did not switch to an alternater plan, and let their tariff and end of cheap one default to Energy Online the mdd increase is based on the new rates, on increased unit rate costs as of 13-9-11, with about 15% less discount than their previous tariff, that is why at least 50-60% of folks I've dealt with have experienced such large mdd increases, the current range of products are just not as cheap as what was around a year ago, so if the customers usage has not dropeed by 20% + in the last year, the only option to ensure they are not massively behind after winter 2011/12 is to increase the mdd, sometimes it does seem, where did this come from this increase, the letter an eon customer gets re the dd incr does explain, but v long and tedious and most folk don't bother with it. I think there should be circumstances taken into acc when a cust calls in saying they can't afford the incr, but a lot of the time people have very unrealistic ideas about what their actual cost is against what they feel they should be paying, eg I spoke to a lady, just off save Online 3, had been paying £88 a month since Nov 2010, smal cr on acc as of end of Oct 2011 statement, because saveol3 had ended and now on energy online her annual cost was £1392 or £116 a month, she could not get her head around this, after asking her to go away and have a look on comp sites she saw what I was talking about Save Online 11 allowed her to drop mdd to £104, but she was trying to suggest she should only pay £90 a month which is not going to do it, that's for me is the biggest thing, getting customers to understand usage and the cost of, wouldn't solve that we don't like mdd increases, but if they can be shown more effectively why it is, might be an easier sell.

Eon will refund credit at this time and will lower direct debits at this time of year, what they wont do is allow for a refund and dd drop, that will potentially mean a debit after winter consumption.

It seems to me that in some cases, Eon are mis-managing DD accounts. A degree of credit at this time of year is desirable. Refunds should generally only be given if the contract has come to an end, the DD has been incorrectly set and collected excessive payments or for a marked (possibly unexpected) change in usage.

An adjustment to the DD should only be made if the reassessment indicates it is required.

There is nothing wrong pers se with a debit balance after the winter period. It is Eons policy to require a zero spring balance that is wrong.

What has affected many folk this year that between 1-7-11 and 31-10-11 Fix Online 8, Save Online 2and 3 all ended that had massive discounts on the unit rate, and if they did not switch to an alternater plan, and let their tariff and end of cheap one default to Energy Online the mdd increase is based on the new rates, on increased unit rate costs as of 13-9-11, with about 15% less discount than their previous tariff, that is why at least 50-60% of folks I've dealt with have experienced such large mdd increases, the current range of products are just not as cheap as what was around a year ago, so if the customers usage has not dropeed by 20% + in the last year, the only option to ensure they are not massively behind after winter 2011/12 is to increase the mdd, sometimes it does seem, where did this come from this increase, the letter an eon customer gets re the dd incr does explain, but v long and tedious and most folk don't bother with it. I think there should be circumstances taken into acc when a cust calls in saying they can't afford the incr, but a lot of the time people have very unrealistic ideas about what their actual cost is against what they feel they should be paying

Many of the posters complaining about their DD payments being excessively raised have already factored this into their own calculations. What they haven't factored in is the effect of the zero spring balance policy, which you don't mention.

The letter of explanation you refer to seems to me that it is waffle all about rising costs, how Eon are still the cheapest etc and doesn't include the effect of the zero spring balance requirement. Correct me if I am wrong.

I spoke to a lady, just off save Online 3, had been paying £88 a month since Nov 2010, smal cr on acc as of end of Oct 2011 statement, because saveol3 had ended and now on energy online her annual cost was £1392 or £116 a month,

So Eon customers are being told that their DD payment are being calculated on the basis of cost of annual usage/12 = MDD payment.

Why are Eon not explaining that this isn't how DD payments are calculated unless the 12 month period starts within Eons definition of spring?

meggsy

Thought I would post here that we have a couple of replies from Consumer Focus on another thread and I am currently waiting for a reply on zero spring balances.

https://forums.moneysavingexpert.com/discussion/3369410

DirectDebacle

Mrs Arcanum,

Thank you very much for that. What they have sent you looks identical to the generic explanation they submitted to Ofgem during their investigation of DDs (I'll have to check). The leaflet you have posted is now almost three years old.

It reads to me as an almost perfect description of a 'default' DD scheme. They use the words 'around zero' which is not as definitive as the terms used now. In any event it is a generic explanation and a balance around zero would be expected whatever month the 12 month period commenced. For obvious reasons they chose 'spring'.Checked. It isn't the same one as I thought.

Now we need the [STRIKE]'reassessment'[/STRIKE] sign up explanation.:D