Big hikes in direct debit payments - EON

backfoot

Mrs_Arcanum wrote: »

Finally a useless reply from E-On (repeated twice to no good purpose).
I particularly DO NOT want to talk to someone on the phone or spend the money doing so. :mad:

The bit in bold is particularly irritating as it makes no sense at all.

I am afraid Eon have lost the plot.

The reply you have received does not explain the basis for the DD change. They are obliged under their License Conditions to do this clearly and in an understandable way.

The response,which is threatening in suggesting you come off the DD scheme is appalling and I hope that the Eon Reps will agree.

You do not have to ring anyone. I would ask them to either:

1. agree to whatever figure you think is appropriate

or 2. provide a substantive reply explaining in detail (not general) how they calculated your DD payment.

or 3. To issue a deadlock letter, so that the Energy Ombudsman can adjudicate on the correct value and determine whether Eon have abided by License Condition 27 in dealing with your DD payments and subsequent complaints.

DirectDebacle

This is where we were back at post #39.

Mrs_Arcanum wrote: »

Working things out based on last years consumption figures I would only need to increase the DD by £11 (to £121) to cover a whole years use & this would still leave me £87 in credit.

Once I have a reply to my complaint (Thursday at the latest) I will take things further if needed.

By then you had had a review which showed a reduction in the DD and you refused it and had the DD set at £90. You sensibly increased this yourself to £110 because of the Sept price increase.

On what basis did you calculate the DD payment. Did you work out your usage over the period Nov 2011-Oct 2012 and divide by 12, for example. If so why?

I am going back to a question I have regularly asked you which has not yet been answered. That is what explanation have you received from Eon re the basis upon which they have calculated your DD and what did you understand that explanation to mean.

The explanation on their website, to me, lacks clarity. jalexa has pointed out the mathematical complexities of the zero spring balance policy and none of these are detailed on the website.

What is important is that each customer is entitled by law (Standard Licence Condition 27) to a full explanation of the basis upon which their DD is calculated and Eon are required to give it. The explanation will vary from customer to customer.

We need to know what you understood from the information Eon gave you in order to gauge which way might be best for you to dispute it.

If they have not explained their DD policy to you in full (including calculations) then an approach alleging noncompliance with SLC 27 and requiring a DD be set as you believed it would have been (ie 12 even monthly DD over the period Nov-Oct) would be the start.

Before you can argue this you need to be given and insist Eon give you the full details of how they have arrived at their present DD amount.

If you understood perfectly well Eons zero spring balance policy and how it worked in practice, then your dispute will be purely over the actual figures used to calculate the DD. Again you can only dispute the calculations if you are given them to examine.

To start, in short, you require the full details of your DD calculation from Eon. If they are not available online then request they be sent to you forthwith.

If Eon want to discuss an alternative payment scheme with you it would mean a loss of discounts as Age UK requires a DD payment to qualify for them.

jalexa

BenNevis wrote: »

[*]“…including information as to the quantity of gas which the licensee reasonably estimates has been or will be supplied under the relevant Domestic Supply Contract.” Note the words “under the…contract

I missed your post yesterday. It is interesting that different people can see different weasel words (mine in red). I think this just shows how badly worded the regulation is. Seasonal consumption of the heating fuel is fact, indeed regulators must know it occurs because of their previous experience of NPower "sculpting". Yet that did not stop the regulator drafting a regulation which is silent on winter consumption, tariff increase and (for whatever reason) balance shortfall recovery over an "interim" review period of less than a year even though all suppliers direct debit information mentions "interim reviews". What did the regulator think suppliers would make of "will be supplied"?

Anyway I think the real issue the suppliers are failing on, allowed to I regret by consumers not excercising their rights, is SLC27.14 concerning the clear explanation of the calculation.

DirectDebacle

poet123 wrote: »

Similar issue, awaiting a phone back from Eon in the next ten mins so any pointers appreciated.

Long story short. Input usage and payment details into swap site n Sept 2010 when we paid £200 dual fuel. Eon quoted £141 on those accurate figures. Changed to Eon Oct 2010.

No spring review done (they are trying to find out why)

Received a bill with a £450 deficit last week

Now received a request to increase DD to £256 pcm.

I never had the upfront payment of DD explained I thought all plans worked the old way where you built up a credit in summer and used it up over the higher usage months.

I am livid that they set the amount, had a chance to change it but never bothered and now we are so much in deficit. I can pay it, but I think their tactics are reprehensible.

Any advice?

Did you receive the call back.

Appears that last year the DD should have been @ £178.50 to achieve zero balance by Oct 2011.

Allow 18% price increase and assuming same usage, annual cost for 2011/12 would be around £2527. Add £450 debit and DD for zero balance Oct next year £248. Not far off what Eon calculate.

Of course if the DD had been correctly monitored in the first place the debt would not have built up. You can assist in avoiding a repetition of this by submitting regular meter readings. If that is already your practice and Eon were at fault by not reacting to the meter readings, there is cause for complaint.

BenNevis

jalexa wrote: »

I missed your post yesterday. It is interesting that different people can see different weasel words (mine in red). I think this just shows how badly worded the regulation is.

I completely agree with you and as you’ve pointed out Ofgem’s people must have known when drafting SLC 27.15 that certain energy companies were already morphing their systems in favour of spring alignment and yet no effort was made to include specific words to prevent it. This is either a deliberate omission by Ofgem or just carelessness but either way it’s not acceptable behaviour for a regulator.

After I looked at your post #30 (of this thread) that I got the idea for my previous post (#50) which I hope demonstrates that despite the poor wording of SLC 27.15 that there’s still sufficient content to argue that the only reasonable way this condition can be interpreted is that any calculation of a fixed DD payment should be based upon a customer’s anticipated annual consumption. If this is the case then IMO any other method is or has to be in breach of this licence condition and a customer would have the right to insist on the proper (annual) method of calculation.

The very least Ofgem could do is to explain its own position on this as it did (in the end) when pressured over exit fees. That’s Ofgem’s job after all.

DirectDebacle

I completely agree with you and as you’ve pointed out Ofgem’s people must have known when drafting SLC 27.15 that certain energy companies were already morphing their systems in favour of spring alignment and yet no effort was made to include specific words to prevent it. This is either a deliberate omission by Ofgem or just carelessness but either way it’s not acceptable behaviour for a regulator

.

Why would Ofgem want to prevent spring alignment? Ofgem explained in their decision document it was not their intention to be prescriptive when drafting SLC 27. In what way is that 'not acceptable behaviour for a regulator'?

After I looked at your post #30 (of this thread) that I got the idea for my previous post (#50) which I hope demonstrates that despite the poor wording of SLC 27.15 that there’s still sufficient content to argue that the only reasonable way this condition can be interpreted is that any calculation of a fixed DD payment should be based upon a customer’s anticipated annual consumption. If this is the case then IMO any other method is or has to be in breach of this licence condition and a customer would have the right to insist on the proper (annual) method of calculation.

Why do you say SLC 27.15 is poorly worded? How would you word it?

If your interpretation of SLC 27.15 is correct then you are successfully arguing against your opinion that 'spring balance' should have been specifically prevented in the licence conditions.

My view is that SLC 27 is well drafted and I see no weasel words nor any reason for tariffs or seasonal consumption to be included.

I suspect the reason Eon have not so far published a full description and explanation of their DD policy is because to do so would, in all probability, drive customers towards other suppliers.

The very least Ofgem could do is to explain its own position on this as it did (in the end) when pressured over exit fees. That’s Ofgem’s job after all.

Why don't you write to Ofgem and suggest they explain their position?

jalexa

DirectDebacle wrote: »

Why do you say SLC 27.15 is poorly worded? How would you word it?

Your post quotes and I think is a specific response to BenNevis but it includes sentiment in the response to my earlier exchange with BenNevis.

I commend that everybody interested reads the remarkably prescient Consumer Focus comments on the proposed SLC27 regulation, in particular the section headed "Review of direct debits within 90 days of a price change".

http://www.ofgem.gov.uk/Consumers/Documents1/Consumer%20Focus%20Response%20to%20DD.pdf

Of course that is *exactly* what Eon and others are doing. The killer Consumer Focus comment is somewhat underplayed, perhaps because they failed to grasp that suppliers would have the brass neck to humiliate Ofgem by an interpretation and practice of recovering an 18% hike on 80% of heating consumption over an interim "short-year".

The Consumer Focus "killer comment" is this...

"Under the proposed guidance, suppliers could argue that ‘timely basis’ means once every six months, irrespective of price changes. This undermines the principle of uniform payment spread across a 12-month period and could lead to substantially different payment levels over the year. A little prescription in this one area, we feel, would be appropriate."

This is not (only) a 'spring aligned' issue it is fundamentally an interim review issue, hence the Consumer Focus reference to "six months".

Mrs_Arcanum

DirectDebacle wrote: »

This is where we were back at post #39.



By then you had had a review which showed a reduction in the DD and you refused it and had the DD set at £90. You sensibly increased this yourself to £110 because of the Sept price increase.

On what basis did you calculate the DD payment. Did you work out your usage over the period Nov 2011-Oct 2012 and divide by 12, for example. If so why?

I am going back to a question I have regularly asked you which has not yet been answered. That is what explanation have you received from Eon re the basis upon which they have calculated your DD and what did you understand that explanation to mean.

The explanation on their website, to me, lacks clarity. jalexa has pointed out the mathematical complexities of the zero spring balance policy and none of these are detailed on the website.

What is important is that each customer is entitled by law (Standard Licence Condition 27) to a full explanation of the basis upon which their DD is calculated and Eon are required to give it. The explanation will vary from customer to customer.

We need to know what you understood from the information Eon gave you in order to gauge which way might be best for you to dispute it.

If they have not explained their DD policy to you in full (including calculations) then an approach alleging noncompliance with SLC 27 and requiring a DD be set as you believed it would have been (ie 12 even monthly DD over the period Nov-Oct) would be the start.

Before you can argue this you need to be given and insist Eon give you the full details of how they have arrived at their present DD amount.

If you understood perfectly well Eons zero spring balance policy and how it worked in practice, then your dispute will be purely over the actual figures used to calculate the DD. Again you can only dispute the calculations if you are given them to examine.

To start, in short, you require the full details of your DD calculation from Eon. If they are not available online then request they be sent to you forthwith.

If Eon want to discuss an alternative payment scheme with you it would mean a loss of discounts as Age UK requires a DD payment to qualify for them.

Unfortunately my logic was no more than gut feeling in deciding an amount. I have however responded to their reply with:-

Your recent response fails to address my initial question nor have I received a satisfactory explanation compliant with Standard Licence Condition 27.14.

MY ISSUE IS NOT WITH DD PAYMENTS but the outrageous and unsubstantiated amount.

Taking me off DD would deny me the relevant discounts for paying by DD and my current tariff is dependent on DD.

Following my annual review in May YOU suggested a ridiculously low amount for the DD. This DD amount following the annual review is supposed to be enough to arrive at a zero balance the following year. Clearly your system failed abysmally. I decided ??90 would be nearer the mark and as soon as the price increase was announced I increased this DD to ??110.00 pcm. I am in credit BEFORE the winter quarter and can see NO justification for any increase over ??120.00 as this should be enough to arrive at a zero balance by May 2012.

Will now wait and see.

DirectDebacle

jalexa wrote: »

"Review of direct debits within 90 days of a price change".

http://www.ofgem.gov.uk/Consumers/Documents1/Consumer%20Focus%20Response%20to%20DD.pdf

Of course that is *exactly* what Eon and others are doing. The killer Consumer Focus comment is somewhat underplayed, perhaps because they failed to grasp that suppliers would have the brass neck to humiliate Ofgem by an interpretation and practice of recovering an 18% hike on 80% of heating consumption over an interim "short-year".

The Consumer Focus "killer comment" is this...

"Under the proposed guidance, suppliers could argue that ‘timely basis’ means once every six months, irrespective of price changes. This undermines the principle of uniform payment spread across a 12-month period and could lead to substantially different payment levels over the year. A little prescription in this one area, we feel, would be appropriate."

This is not (only) a 'spring aligned' issue it is fundamentally an interim review issue, hence the Consumer Focus reference to "six months".

Consumer Focus were expressing concern over one of the suggestions by Ofgem in their summary of best practice which said
"suppliers should ensure that reassessments are carried out on a timely basis". They were not expressing any concern over SLC 27. It hadn't become law by then.

At that time price increases could be notified to customers by suppliers up to 65 working days from the date of the increase. Consumer Focus were concerned that a DD reassessment carried out more than 90 days from the date the price increase took effect could lead to substantially different payment levels over the year.

In my opinion this potential problem was addressed by SLC 27.15.

In any event on 28th April this year the concerns Consumer Focus had at that time (Oct 2009) were put to rest by the change to price notifications under SLC 23. As you are aware price changes now have to be notified 30 days in advance.

I would think that Ofgem would expect suppliers to be notifying customers DD reassessments together with the price increase notification. If not very soon afterwards and before the price increase became effective.

None of the above has anything to do with what we are talking about, which is Eons spring balance policy and whether or not it is explained in accordance with SLC 27.

I fail to see a 'killer comment', neither (so far) a humiliation of Ofgem.

Mrs_Arcanum

Success

A £120 pcm has been accepted. Will monitor my usage closely to see how this pans out.