Consumer Focus response to MSE posts on E.On 'Spring review' DD scheme

Consumer_Futures_Representative

Hello everyone

I’m writing from Consumer Focus about the issue of E.ON’s policy around monthly Direct Debit payments, specifically its 'Spring Review' practice.

This issues was referred to us by a regular MSE poster - DirectDebacle - and we’ve contacted E.ON to get more information about its Direct Debit practice. In doing so, we referred to the various threads on MSE that demonstrate the issue and the effect on E.ON’s customers.

Our discussions with E.ON about the DD practice are ongoing. However, the evidence Consumer Focus has been able to obtain to date is largely anecdotal. In order to continue to take this issue forward with E.ON, and ensure consumer concerns are taken seriously by the company, we need to be able to present actual complaints from customers who have been/are being negatively affected by this practice.

If anyone on the forum has a complaint related to the Spring Review policy then please feel free to email us at [EMAIL="contact@consumerfocus.org.uk"]contact@consumerfocus.org.uk[/EMAIL] and put ''E.ON Spring Review'' in the subject. We will need specific details about the impact that E.ON’s practice has had on the ability to manage your energy account.

Consumer Focus also regularly analyses complaint data collected by Consumer Direct so another option is to contact them. Consumer Direct will also be able to able to give you advice about how to resolve your individual complaint, which is something Consumer Focus unfortunately can’t provide.

Consumer Direct can be contacted on 08454 04 05 06 or use their online complaint form: http://www.direct.gov.uk/en/Diol1/DoItOnline/DG_195918

If you are in a vulnerable situation and need more assistance to take up a complaint against E.ON you can speak to Consumer Focus' Extra Help Unit. The Extra Help Unit receives its work via referrals made by Consumer Direct. You will need to contact Consumer Direct, who will then assess whether to refer you to the Extra Help Unit depending on your circumstances and the seriousness of your complaint.

Once again, thanks for your input and comments.

Consumer Focus Energy Team

backfoot

Thank you for picking this issue up which has been a cause of concern for many posters as you have seen. A number of the regular posters have tried to help customers by giving advice on how the impact on them may be challenged and in the main it appears that Eon have conceded the point or met the customer part way.

Such a strategic response by Eon, of course, seeks to minimise the publicity and subsequent complaints. We have also sought an understanding of the policy from Eon and tried to unravel what has become a complex system instead of the easily understood 1/12th apportionment.

You will no doubt have read the many posts and arguments regarding the policy so it is not worth going into detail again here. It is appreciated that any referal to Ofgem is better supported by real case studies and I hope customers will provide the detail to you. The reality is often that customers seek help,advice is given and they move on.

Notwithstanding that, we have a self evident situation that Eon's policy is by definition one that is designed to maximise cash flow to them at customers expense. Customers starting a contract towards the winter are hit hard as are those, where price increases of around 18% have been recovered over half year periods. Customers are clearly being penalised for no logical reason other than Eon's benefit.

There is absolutely no fundamental reason to believe that a zero spring balance policy is sacrosanct other than it suits Eon for them to claim it is a good thing. Such a view needs to robustly challenged .

Following a significant success with Ofgem following direct referal of the abuse of Termination Fees by Suppliers, I have in turn referred this matter to Ofgem as well and understand Martin Abraham is looking into it.

On a matter of detail, I can personally report that on requesting a quote from Eon by phone, I was given a straight 1/12th monthly direct debit figure and was not informed about the zero balance spring policy.

jalexa

Consumer_Focus_Representative wrote: »

A warm welcome to a hot topic.

Can I also make you aware that Edf are operating a similar policy, though I would say a little less "aggressively" than Eon. However in the case of Edf there is additionally the issue that their new new billing system appears somewhat "dysfunctional" with respect to the need for the recalculation on the submission of a customer read outside a billing window.

DirectDebacle

Thank you for the informative update and the work you have put in so far, on this matter. It underlines the fact that consumer organisations are there to help but it requires customers to make them aware of problems in order for them to be addressed.

In cases such as E.ON customers need to ask themselves,'is this problem individual to me or is it likely to affect many more customers?'

If the answer points to the latter then it will not take too much time and trouble to forward the details to Consumer Direct for their information, even if you yourself have had a satisfactory resolution from the supplier.

By doing so, widespread practices, that may not be in the interest of consumers, may be more quickly identified, assessed and addressed.

MSE, as we have seen in the past, can be a powerful tool, but needs to be used in the correct way. Keeping matters in-house is not always the best one. If anyone reading this thread has had problems with E.ON DD policy and it has been resolved, then please forward the details as per the C.F. post, if you have not done so.

This will be of use to C.F. including the method of resolution offered.

backfoot

Bumping this thread back up.

Unfortunately, the thread has coincided with the holiday break when the Forum is quiet.

It was also started well after the high volume of complaints which came along with the huge Eon price rises.

Neverthless, if you were affected as a customer please provide details to CF.

jalexa

backfoot wrote: »

Bumping this thread back up.

Well bumped.

This comment is really for the CF rep (who I trust is not still on holiday:D)

In the original CF rep post this was stated "We will need specific details about the impact that E.ON’s policy has had...."

Can I respectfully suggest that you replace "policy" in the above request with "practice". The Eon "policy" (on the issue) is not clearly and unambiguously stated anywhere so how can consumers be sure of their case. I have yet to see any evidence of compliance with SLC 27.14

Lets have some Consumer Focus commentary on the requirements to satisfy SLC 27.14, then consumers will have a specific issue to bring to your attention.

Consumer_Futures_Representative

Hi Jalexa

Take your point on board regarding the difference between policy and practice. Have amended forthwith.

Thanks

Consumer Focus Energy Team.

DirectDebacle

Self explanatory email sent to MSE Team. I hope they include it in the weekly email and Consumer Focus receive adequate responses because of it.

If E.ON can be forced to abandon this practice then the knock on effect will be to prevent the other suppliers from following suit.

With reference to this post from Consumer Focus- https://forums.moneysavingexpert.com/discussion/comment/49943389#Comment_49943389

Over the past few months there have been many complaints re large increases to DD payments which posters have found difficult to understand (and meet). The majority of these have been from E.ON customers, though a few have related to other suppliers.

In relation to E.ON there is evidence that in many instances, all or part of the DD increase has been caused by E.ON ‘zero spring balance policy/practice’. Consumer Focus have undertaken to look into this. In order to do so they require evidence from E.ON customers that their DD payments have been increased to achieve a zero spring balance (which would not normally be the case). There have been several threads and many posts that this is the case. No doubt there are many instances of this but they may not have been noticed or necessarily caused hardship and therefore not come to notice.

I have made several posts requesting affected customers contact Consumer Focus with details of their case even if the dispute has been resolved to their satisfaction by E.ON.

Consumer Focus, however, have received little in the way of evidence from customers. They are willing to do all they can to address this problem but need hard evidence from customers to support their case.

It was at the request of a MSE member that Consumer Focus have undertaken their enquiries. In order to bring this problem to a wider audience perhaps you would include it in a weekly email and encourage subscribers to contact Consumer Focus.

If Consumer Focus are well armed with evidence of customers having difficulty in meeting unwarranted DD increases then they may well be able to prevent E.ON from continuing this practice either by persuasion or referral to OFGEM.

backfoot

Brilliant idea DD. :T

DirectDebacle

backfoot wrote: »

Brilliant idea DD. :T

Wouldn't do any harm if it was backed up with similar requests from others.:)

backfoot

I am really pleased that the Consumer Focus Rep has engaged with the MSE Forum. I also understand why the evidential process is important in helping to take this matter forward.

What troubles me is that I am concerned that the impact of Eon's policy will remain hidden because of a number of factors which will not result in a formal complaint to Consumer Direct or details being forwarded now to Consumer Focus.

1. Eon's explanation of the increase. Take for example, the Eon Rep's response in post 30 of this thread

https://forums.moneysavingexpert.com/discussion/comment/50037683#Comment_50037683

Very well written,very plausible but only a partial answer because he fails to tell the customer that the price increases and small debt recovery are recovered over the next few months at seasonally high consumption levels, rather than spread over the 12 month period from his contract start date which is mid December. How else does he get an increase of 60%?

2. Presented with a take or leave it answer from a call centre,does the customer understand their rights?

3. Do they know who Consumer Direct is?

4. Do they have the appetite to take the issue forward?

5. Under challenge Eon will have partially conceded lesser increases to avoid escalation while keeping the policy intact.

I think we have seen huge volumes of complaints on the Forum because it is perceived as much easier to document it here and hope for help, rather than institute a formal complaint. Particularly so when they have been told there is no valid complaint.

Only a few of us have the knowledge to argue breach of SLC27. (even though the breaches are quite evident) Then the reality is that the call centre Rep at Eon hasn't even heard of SLC27 never mind accept your argument.

The facts are before CF already. The argument is one of logic and understanding the impact of zero spring balance and lack of supporting information. The referrer DirectDebacle gets it, other knowledgeable posters get it, Eon get it. CF must surely get it?

Does it really need lots of formal complaints to judge whether this is fair or not?

I am not so far personally affected by it because I choose to avoid Eon because of this policy and their final bill policy. It therefore reduces effective competition in an already limited market.If they get away with it, all Suppliers will do it and the whole goalposts will have shifted.

What I can easily conclude , is that it is a policy designed to benefit Eon's cash flow at customer expense.

Isn't it equally plain for CF and Ofgem to see this?