E.ON press the re-set button

JimmyTheWig

jalexa wrote: »

You gave an example of an autumn start paying 1/12th payments having a debit balance by "spring". Well yes that is because spring is less than 12 months from autumn.

It would also have a debit balance in the spring, say, five and a half years from the start of the service.

Except of course, with E.ON this should not arise with initial payments correctly set and managed in accordance with the E.ON "Twitter Table".

I agree. That's why I like it!

backfoot

It's a totally bizzare assertion that we should pay premium amounts up front so that we are always in credit, to allow us to switch in future without a debit balance.

How do I find the cash to do this up front if it doesn't exist at the next switch?

It's a very weak argument to justify this unfair system.

Or perhaps Eon have designed it, to first annoy you badly with inexplicable rises, so that you can quickly leave without problem.:rotfl:

JimmyTheWig

backfoot wrote: »

How do I find the cash to do this up front if it doesn't exist at the next switch?

People with cash-flow problems (and they are the only people who this _really_ affects, other than Stoozers very marginally) will generally "find a way" when a bill comes in. That's how we managed as students, certainly. That's how others I know with cash-flow problems operate.
So when the bill comes in it will get paid.
If the bill was smaller, the difference _will not_ get set aside to pay off a debit balance if they want to switch at some point in the future.

Like I say, that's based on my experience and that of people I know. Others may have had different experiences which could shoot my argument down in flames.

DirectDebacle

People with cash-flow problems (and they are the only people who this
_really_ affects, other than Stoozers very marginally) will generally "find a
way" when a bill comes in. That's how we managed as students, certainly. That's
how others I know with cash-flow problems operate.
So when the bill comes in
it will get paid.

So you are arguing that the (relatively) simple 1/12 scheme be replaced by a more complex and less flexible scheme. The effect of which will be of no benefit to the majority of customers but harmful to some.

It seems to me you are arguing for a condition that already exists (under the 1/12th scheme), to be mandatory for all. This will restrict choice, cause detriment to some customers and be more difficult to manage. After around 20 years of the 1/12th scheme suppliers still can't manage them properly.

E.On gave the reason for introducing their scheme as a response to customer feedback. They told E.On they didn't like big bills at the end of winter. Anyone on a correctly managed 1/12 scheme would not be receiving a big bill after 12 months in any case. It is worth noting that E.On have not stated an additional benefit of their scheme was to make it easier for customers to switch away from them. Neither have they said it benefitted E.On cash flow and the savings would be passed on to their customers.

What is your evidence that 1/12th DD scheme is having a detrimental affect on switching rates.

At the moment E.On policy is causing some of their customers hardship through unnecessarily excessive DD payments and causing others to switch in protest. It is those who do not have the means to switch that concern me the most. The only way to help them is a meaningful change of policy by E.On.

JimmyTheWig

DirectDebacle wrote: »

So you are arguing that the (relatively) simple 1/12 scheme be replaced by a more complex and less flexible scheme.

I agree that the complexity, and more importantly the difficulty in explaining it, is a problem.

The effect of which will be of no benefit to the majority of customers but harmful to some.

I don't think that getting in to debt is generally a good idea. If people can't afford to pay for the energy that they have used then they have a problem that needs addressing and may need help.
Once they have paid for what they have used then they will be free to switch to a better deal. So I don't think it is harmful to them.

It seems to me you are arguing for a condition that already exists (under the 1/12th scheme), to be mandatory for all.

Are you saying it already exists because people can choose to pay a higher DD each month to bring themselves into zero spring balance? People (especially those with cash-flow problems) wouldn't do that.
Sometimes people need to be forced into the route that is best for them.

This will restrict choice,

I disagree. I think it will increase competition by allowing more people the option of switching.

cause detriment to some customers

Already discussed.

and be more difficult to manage. After around 20 years of the 1/12th scheme suppliers still can't manage them properly.

As I've said, I agree the complexity is a downside.

E.On gave the reason for introducing their scheme as a response to customer feedback. They told E.On they didn't like big bills at the end of winter. Anyone on a correctly managed 1/12 scheme would not be receiving a big bill after 12 months in any case.

No, but they would get what looked like a big bill (i.e. a large outstanding balance) in the spring. I can appreciate people not liking this.

It is worth noting that E.On have not stated an additional benefit of their scheme was to make it easier for customers to switch away from them.

No, assuming this move has come from the energy company rather than a body on our side then I can only see this as a welcome by-product.
Credit card companies don't advertise an additional benefit of a 0% deal is you can make money by putting what they lend you into savings.

Neither have they said it benefitted E.On cash flow and the savings would be passed on to their customers.

I believe they have said (maybe not loudly) that they get the benefit from this additional cash-flow which is why they give their discount for DD. I presume that their DD discount would be lower if they operated a 1/12ths policy.

What is your evidence that 1/12th DD scheme is having a detrimental affect on switching rates.

Nothing concrete, just that I've heard of people in real-life and on here who can't switch because they have a debit balance. That _must_ have a detrimental affect on switching rates.

At the moment E.On policy is causing some of their customers hardship through unnecessarily excessive DD payments

Those in hardship - those who cannot afford to pay for the energy they have used - should be helped. Whether that's with advice or money would depend on the situation. But that's the case however they pay.

and causing others to switch in protest.

Not everyone agrees with me. I can handle that.

It is those who do not have the means to switch that concern me the most. The only way to help them is a meaningful change of policy by E.On.

I completely agree, and that's been my point from the start.

The only group of people I can think of who don't have the means to switch are those with a debit balance that they can't afford to pay off. Zero spring balance should ensure that no-one gets into this situation.

DirectDebacle

JimmyTheWig wrote: »

I completely agree, and that's been my point from the start.

The only group of people I can think of who don't have the means to switch are those with a debit balance that they can't afford to pay off. Zero spring balance should ensure that no-one gets into this situation.

No, you are evading the point. This thread and the numerous similar ones re E.On DD policy have had nothing to do with complaints re switching refused due to debt blocking.

They have been in respect of the sharp and unexpected demand for increased DD payments as a result of their DD policy, as you well know.

Your point on all suppliers aligning all DD accounts to a spring balance in order to avoid DD debit balances is logical. It is also irrelevant to the subject matter and, arguably, its effect so negligble that it can be ignored.

Both Ofgem and suppliers do not include DD accounts within their definition of debt except in the case of a DD set up specifically to re-pay a debt.

In 2011 Ofgem published a poll they commissioned Mori to conduct on switching.

At the time around 50% of customers had never switched. Of those, 77% stated it was because they were happy with their supplier. Only 1% stated it was because of debt. The poll was across all payment methods. Even if DD accounts at the debit stage of their cycle were included, it would merely represent a fraction of 1%.

Supplier abuse of the DD system is the problem to be addressed.

backfoot

In my opinion,Jimmy has found, at best, a very marginal positive from having zero spring balance. In order to justify it, he ignores the same cash flow implications of needing the same lump sums or more paid up front, for no good reason.

In fairness, I think posters have listened to the issue and debated it, but quite honestly I think it pales into insignificance compared to the problems, hardship and general confusion that the policy causes.

There is a big picture here, being sidetracked by a minor sub plot at the very edge. I think that is being promoted because Jimmy is in a secure financial position and they are probably on the same approximate cycle that Eon desire.:)

JimmyTheWig

A reasonable summary, guys.

I feel that this part of the discussion has come as far as it's going...

Blackdog

Perhaps this week we will hear from Eon with their explanation of their direct debit policy and answering concerns expressed on this thread. After all it was 15 Feb when Malc said they were consulting with the top of the organisation on a reply. Surely by now they must have discussed this and be ready to tell us what is going on.

SnowMan

7th February 2012: EON release press release saying they have responded to customer feedback and are changing their direct debit policy. This is followed by numerous posters asking what the new direct debit policy is and and what has changed or even what the old policy was.

10th February 2012: EON Amanda posts to say currently looking into these concerns.

15th February 2012: EON Malc posts to say they are awaiting outcome of discussions at top of business

5th March 2012: Nearly a month on - no answers yet