E.ON press the re-set button

Terrylw1

brewerdave wrote: »

After reading Malc's reply ......Couldn't find a smiley of headless chickens :rotfl:

A pic may do...

backfoot

jalexa wrote: »

Amanda

Thanks for the heads up on that. Looked at the press release and I have a question...

"Completely overhauling E.ON's Direct Debit approach to reduce payment shocks. From the summer, customers joining E.ON's Direct Debit scheme will have their Direct Debit payments reviewed one year after joining."

So is the policy that "one year after joining" there will be a review and the Direct Debit will be adjusted to achieve an account balance in a further 12 months time and during that next 12 months there will be no further reviews unless requested? Will submitting a customer reading implicity trigger a review (a la Edf) or will it need to be explicitly requested?

I can only think that this is loose PR speak. I think all they are trying to do with this statement is change from spring to anniversary as the review zero balance target date.This is simply a high level policy shift under the 'reset.'

The lack of detail to accompany the basic principle,somewhere else, is difficult to understand given that this must have been high priority stuff within Eon and that so much time has elapsed. Unless, of course,a slow drip feed is going on so that the informed commentators don't identify any more issues.

It's why I have learnt not to get too excited until all the information is revealed.With Ofgem investigating as we speak, I am sure there are a lot of nervous Eon Managers.

jalexa

backfoot wrote: »

I can only think that this is loose PR speak. I think all they are trying to do with this statement is change from spring to anniversary as the review zero balance target date.This is simply a high level policy shift under the 'reset.'

Not sure what it is, but I note that prepared answers are not evident. The "headless chickens" comments are very apt (though E.ON's preference is of course to consult "headless turkeys"):D

I was never totally enthused by the 'spring' campaign though it achieved a remarkable result. 'Spring' was only ever a first year issue, subsequent years were already equivalent to 'anniversary'.

One of the E.On announcement bullet points was "Completely overhauling [my emphasis] E.ON's Direct Debit approach to reduce payment shocks.

The mechanism that resulted in "sudden excessive hike" (or "payment shock") was not "spring" but short-year calculation. We can both see there is no "explicit reset" of that practice in the announcement but whether or not the PR puffers understand (quite likely not) it is "implicit" in "completely overhauling...to reduce payment shocks"

Talk you way out of that Mr Cocker.

IMO the only fair and transparent mechanism is a 12 month rolling calculation (from month 1) to deal with your unanswered 18% increase point).

backfoot

jalexa wrote: »

The mechanism that resulted in "sudden excessive hike" (or "payment shock") was not "spring" but short-year calculation.

IMO the only fair and transparent mechanism is a 12 month rolling calculation (from month 1) to deal with your unanswered 18% increase point).

To be fair to the Supplier's (not just Eon) this is actually a tricky one, I think.

I think your suggestion has logic in that it absorbs any price increase over a 12 month period going forward. When it has been 18% that is very important for customers.

The implication, if I am right, is that all customers would get a new zero balance review target date,some 12 months ahead of any price change. Logical yes,but will customer's follow this?

To enable them to understand,it makes it imperative that the detailed calculations under SLC27 would have to be very clear. I worry about the IT flexibilty and the Supplier's ability to manage it.

The Eon campaign, was justified and was essentially a first year issue,as far as I was concerned. It was damaging on a short year basis essentially because it captured seasonal consumption. The massive price increases amplified it dramatically.

Your ongoing concern relates to price increases over a short year only. If those increases are at a level of the 5% maximum, then is it worth changing the anniversary date system?

I am a bit undecided between the logic of your suggestion and the simplicity argument. Have I understood your rolling concept properly?

jalexa

backfoot wrote: »

Have I understood your rolling concept properly?

I probably haven't explained that well (or at all) but hey, its there for debate. But first a preamble (or ramble).

My previous experience of "fixed monthly direct debit" (with E.ON, Scottish Power, Atlantic and others) was that it was a benignly managed process that rarely offended. There was an annual anniversary review and a single interim review.

Then the Regulator and/or Consumer representation identified excessive "debt" (or excessive debit balance) as an area of concern and suppliers embraced certain aspects of the new Regulations with a vengeance. Then there was the "perfect storm" of an exceptionally severe winter, large rate hikes and (in the case of E.ON), 'spring alignment'.

Look at the Ofgem DD guidance table to see that there is a trend to "recalculation aligment" with at least scheduled meter reading.

I'd like to see "fixed direct debit" mean "fixed for 12 months", but I don't believe that is permissable with the (new and current) regulations unless there is a principal term in the contract to that effect. It is clear from the regulations, if not entirely the implementation of some suppliers, that the Regulator's debt avoidance objective was to be delivered by managing the account to the "best and most current information available" [SLC27.15].

To return to "12 month rolling calculation" (for debate), what I suggest is that on any occasion that a payment is required to be altered, the calculation is intrinsically based on 12 months. That is the projected consumption for the next 12 months and the projected costs for the next 12 months, with the current actual account balance following a "valid" read either added or subtracted as appropriate. Then the total is divided by 12. And if there is a cost to that it should be built-in to the tariff. Given a transparent and accurate calculation (per SLC27.14 &15 and compliance on review frequency with the Ofgem guidance table) I am relaxed about the frequency, but every "valid" reading would not be unreasonable.

[Note: "Valid Reading" is defined in the "Billing Code". A customer reading is considered "valid" if used following whatever consistency tests are employed on it by the supplier]

E.ON has demonstrated by the Twitter Table that they understand "seasonal weighting" so can easily deal with a reasonably accurate projected 12 month consumption. On the other hand, Edf with their reported excuse "we do not have 12 months readings" demonstrates either incompetence or "cheating". I am open to "incompetence" except when they come up with contrived explanation. And some "contrived explanations" have been reported.

backfoot

jalexa wrote: »

To return to "12 month rolling calculation" (for debate), what I suggest is that on any occasion that a payment is required to be altered, the calculation is intrinsically based on 12 months. That is the projected consumption for the next 12 months and the projected costs for the next 12 months, with the current actual account balance following a "valid" read either added or subtracted as appropriate. Then the total is divided by 12. Given a transparent and accurate calculation (per SLC27.14 &15 and compliance on review frequency with the Ofgem guidance table) I am relaxed about the frequency, but every "valid" reading would not be unreasonable.

Not sure I am persuaded or convinced.I prefer the more benign approach.

I would keep the 12 month anniversary target date for zero balance.

I would advocate at most a six monthly review to suggest any possible variation. The review working to say parameters of tolerance. Say only changing for amounts differing by 10% or more (anything else advisory).Managing the account flexibly and sympathetically to understand customer input to explain variations.

So aiming for a fixed monthly DD which is only flexed by price changes and with a one off capture of material consumption changes.

Overall,moving back to the simpler former procedures with information available to prevent any nasties appearing on your account.Certainly not doing an EDF and changing at every read.