E.ON press the re-set button

JimmyTheWig

As much as I've defended Zero Spring Balance in the past, even I would say that it is neither simple, open nor transparent!

jalexa

JimmyTheWig wrote: »

As much as I've defended Zero Spring Balance in the past, even I would say that it is neither simple, open nor transparent!

DD quoted another word "fair". The methodology of a 'anniversary balance' calculation is identical to the methodology of an 'spring balance' calculation, only the parameters are different and probably only one parameter. An "anniversary" balance calculation can also result in "sudden excessive hikes" if insufficent time is allowed to recover any projected review debit balance.

IMO the only "fair" Direct Debit recalculation would be a rolling 12 month calculation.

Somebody recently posted an interesting link to an E.ON Ofgem submission in a related thread. Among other things it explained E.ON's aversion to automatically providing a detailed calculation at review, yet without that there can be no "transparency". I have not seen a single MSE post describing a detailed calculation, something E.ON in the submission stated would be provided "on request".

Standard Licence Condition 27.14 requires "clear, plain and intelligible language". Is that the same as a "detailed calculation"? Not sure about that. Why "language" and not "calculation"? I hope that Ofgem will reflect on the lack of SLC27.14 "transparency".

Terrylw1

Is it just me or have the issues over suppliers not understanding their own DD calculation algorithms becoming more of a problem recently? There's always been customers having problems but more and more now suppliers seem to not understand it themselves...SAP rollouts anyone? Have they entrusted a load of consultants who have done it and gone???

meggsy

... and while we wait .. E.on joins the Which Big Switch

http://www.thisismoney.co.uk/money/bills/article-2128099/E-ON-join-Which-Big-Switch-dont-expect-discount.html?ito=feeds-newsxml

E.ON_Company_Rep_Chris

Hi everyone

Following on from conversations between our Head of Residential, Darren Cornish and some forum users, I’m happy to share with you the following update on changes that we will be making to our Direct Debit policy.

We’re introducing the changes in the summer and we’ll explain the new policy to our customers then. There’s been some real interest in this subject on the forums, so we also wanted to make you aware of the changes that are coming.

You can keep up to date on the other changes that we’ve made as part of our Reset Review and those we’re talking about today on our website here:

http://pressreleases.eon-uk.com/blogs/eonukpressreleases/default.aspx

Following an in-depth evaluation of our Direct Debit policy as part of our Reset Review, we have taken the decision to move to an Anniversary Review for all Residential Direct Debit customers. This will take effect this summer.

Under the new scheme, customers will pay a twelfth of their annual consumption per month – regardless of when they join, so if an annual payment should be £1,200, a customer would pay £100 per month.

Previously we reviewed our Direct Debit customers’ accounts every quarter and aligned their payments so that they would reach a zero balance in the spring. This approach allowed customers to build up a credit over the summer months, which would then cover the higher consumption in the winter months and take their account back to zero by the time of their next Spring Review.

Whilst this approach worked well for many customers, it caused problems for those customers who joined us in quarter three or four of the year as they were being required to cover their higher winter consumption and get their account to zero in the Spring, even though they hadn’t had the opportunity to build up a credit over the summer months.

In February this year we changed this policy to allow customers more time to reach a zero balance on their account, if they had joined us after the summer months.

However we recognised that this wasn’t going far enough and we said that we’d carry out a full review of our policy.

We want to make sure that our Direct Debit policy is simple, open and transparently fair. We’ve listened to feedback from our customers and from other stakeholders who told us that they found our current Direct Debit scheme confusing. We know that customers appreciated the principal aims of the scheme – i.e. to stop them falling into debt and avoid bill shock. However some customers found the scheme difficult to understand, so we have decided to make the scheme simpler for customers joining the Direct Debit scheme from this summer. We’ll also continue to review Direct Debit payments if a customer asks us to and if they provide us with meter readings.

We will move to an Anniversary Review for new customers in the summer. For our existing customers, spring will remain their Anniversary Review as their Direct Debit accounts have been set to this cycle.

As a result of the work carried out under our Reset Review, we will also make a number of other changes to make sure that our Direct Debit policy is simple, open and transparently fair, including:

• Improving the tools that our advisors use so that they can more easily review a customer’s Direct Debit payments outside of the anniversary review, particularly helpful for customers who may have had a change of circumstances;
• Providing more training to our advisors to ensure that all conversations they have about the new Direct Debit policy are in customer language and will address any questions or concerns that our customers may have.

We will also continue to automatically refund any credit balance over £5 when we have a customer’s accurate meter reading and which arises as a result of any overpayment in the prior 12 months.

MisterCee72

E.ON_Company_Rep_Amanda wrote: »

As a result of the work carried out under our Reset Review, we will also make a number of other changes to make sure that our Direct Debit policy is simple, open and transparently fair

Thank you for the update Amanda.

In respect of direct debit accounts for existing customers, are E.ON now willing and able to send out a breakdown of the direct debit calculations upon request, or will this be included as standard on bills?

jalexa

E.ON_Company_Rep_Amanda wrote: »

Yes, thank you for the update and good luck with the new policy.

While in one sense E.ON got what they deserved, not withstanding the industry leading engagement of the E.ON web staff:), I've always personally recognised that 'spring alignment' was just a special case of 'short year' recalculation, the result of which can be "sudden excessive hike". (something which this forum has recent alarming reports of Edf Energy engaging in):(

I have yet to be convinced that the new policy will specifically address the issue of "sudden excessive hike" resulting from a 'short year' recalculation.

E.ON_Company_Rep_Chris

MisterCee72 wrote: »

Thank you for the update Amanda.

In respect of direct debit accounts for existing customers, are E.ON now willing and able to send out a breakdown of the direct debit calculations upon request, or will this be included as standard on bills?

Hi MisterCee

We have made some real improvements to the letters we send explaining Direct Debits and the messages on customer’s statements, to make the policy clearer and easier to understand.

We’re not quite there yet in sending out a bespoke calculation automatically but we can certainly provide this on request.

This is something that has always been available and I know not every customer has been provided with. There’s been some training in all our customer service areas over recent weeks that will help to ensure that we give all our customers a full breakdown of their payments and the opportunity to adjust the amount if their circumstances have changed in the past 12mths.

jalexa

E.ON_Company_Rep_Amanda wrote: »

... There’s been some training in all our customer service areas over recent weeks that will help to ensure that we give all our customers a full breakdown of their payments and the opportunity to adjust the amount if their circumstances have changed in the past 12mths.

If I was customer I'd be looking for my "bespoke calculation" but as an informed commentator I am not sure a telephone discussion between a possibly pressured but nevertheless "trained" adviser and a possibly financially challenged layperson is fair or satisfactory. There are some quite complicated factors which really need to be seen and considered at leisure.

SnowMan

A very welcome announcement Amanda.

Yes would be nice to see a calculation set out in writing automatically on every recalculation which is arguably what the license conditions require.

And would be nice to have reassurances there won't be a sudden hike at (say) 9 months if EON think that their original 12 month energy usage was understated then, to recoup the estimated over-use in the following 3 months.

And the customers who have already been Spring realigned (but joined in the late Summer or Autumn say) will still be providing a credit facility to EON relative to if they been anniversary based throughout, but can see there would be a few practical issues switching them back to anniversary also.


So in summary very welcome indeed. Well done to EON for realising that this needed to happen and well done to the regular posters on this forum who have helped to persuade EON that this needed to happen.