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

MisterCee72

Received a short while ago...

Hi Charles,
Thanks for your note - I can tell you that this policy is certainly under review at the moment.
Best,
Justine

DirectDebacle

Crikey! Things move fast.

On Friday 9th March, Paddy Tipping confirms it has been 'looked at' by the Reset Team. Presumably it was this 'look' that prompted the change to be implemented in January which was announced early Feb.

Two days later, Monday 12th March, Justine tells us the Reset Team are reviewing it again.

Obviously the management at E.On have had some feedback on their initial change announced in January and decided to do another review.

I wonder if the E.On reps posting on their Reset thread are aware of this?

Seems like they are waiting for details of the first change and don't know these are now under review.:rotfl:

Or are they?

Will the Reset Team get reset?

Who reviews the reviews when theyv'e been re-reviewed?

Who........? etc.

Who knows the secret of the Black Magic box?

backfoot

I have been asked by OFGEM to post the following statement regarding Eon's Direct Policy on the MSE Forum.

''Ofgem is aware of this issue on Eon Direct Debits and is currently reviewing the complaints we have received on this matter. Our review is a continuation of the work that Consumer Focus has been doing in this area. Ofgem’s concerns relate to Eon’s compliance with a number of the Standards Conditions of both the Gas and Electricity Supply Licences and other related obligations.

Ofgem takes compliance with all these obligations seriously and will be having regard to whether the complaints we have received satisfy the criteria for opening an investigation in accordance with our published Enforcement Guidelines: http://www.ofgem.gov.uk/About us/enforcement/Documents1/Enforcement Guidelines post consultation.pdf

If any readers have any specific complaints to refer to Ofgem on this issue, please contact [EMAIL="consumeraffairs@ofgem.gov.uk"]consumeraffairs@ofgem.gov.uk[/EMAIL] and mark emails “for the attention of the Enforcement and Competition Policy Team”.

DirectDebacle

Well done for all your work in bringing this to the attention of Ofgem. Fingers crossed they will find something they think they can investigate.

I have sent them this:

Complaint re E.On direct debit practices.

Dear sir/madam,

As a potential E.On customer I wish to complain that the information given by
E.On, in the way that their direct debit policy is practiced, is mis-leading and
anti competitive.

They present their direct debit scheme as no different to the usual 1/12th payment scheme that customers are familiar with.

It is described as such with the exception that a zero spring balance policy is operated on all accounts. No detail of how this policy impacts upon the agreed fixed direct debit amount is
given

My own investigations reveal that the policy can in itself, cause sudden and unexpected upward variations in direct debit payments. Such variations may be of significant disadvantage to customers and are at odds with the raison d’etre the
direct debit scheme was introduced.

It appears that E.On deliberately withhold this information from customers or potential customers. By so doing customers are denied the information they need to make an informed choice on selecting a supplier. This is unfair on both the customer and other suppliers.

I understand E.On have used this practice since April 2009. Further that on February 7th this year they announced a change to this policy which they claim took effect on 16th January. E.On have not given any details of the alleged
changes they implemented.

E.On have forced a policy upon their customers which is clearly not part of their terms and conditions and is a gross distortion of the direct debit scheme customers are led to believe they are signing up to.

Ofgem could require suppliers to offer the usual 1/12th direct debit scheme as the default direct debit scheme on all relevant tariffs. Suppliers could then offer alternative schemes, such as E.On’s as an option.


I trust this matter will be fully investigated.

Yours sincerely,

As a footnote Consumer Focus have made two requests to E.On for details of the changes E.On announced on 7th February.

Neither have been responded to. Now the matter has been forwarded to Ofgem it is unlikely they will be.

Blackdog

Ofgem haven't opened an investigation yet according to post 124, they are just considering it. Perhaps E.on could do the decent thing and change their policy before the investigation is opened. It would save everyone (including E.on) a lot of time, stress, money and effort.

backfoot

Blackdog wrote: »

Ofgem haven't opened an investigation yet according to post 124, they are just considering it. Perhaps E.on could do the decent thing and change their policy before the investigation is opened. It would save everyone (including E.on) a lot of time, stress, money and effort.

I agree that my simple objective in this has been for Eon to operate the normal 1/12th basis of calculating DD's. Eon then become a viable choice from an already limited choice of Supplier.

On the wider point, Eon have operated a policy for at least two years, which is imho clearly outside of the License Conditions under which they are obliged to operate.

That has been cynical in its approach. The subsequent delay and obfuscation to address the core issue has left the Eon management without credibility.

The so called 'reset' did nothing, but rather has continued the ongoing breaches of License Conditions and unfair policy. There is simply no point in having Regulations or a Regulator if Enforcement is not implemented.

It has taken a huge battle and lots of effort for a body of diligent customers and observers to even get Ofgem to look into these potential breaches.

If Eon are brought to account for it, then that is their problem and to their cost financially, but more importantly their reputation.

Without enforcement,there was no sign of a real policy shift by Eon.

jalexa

Blackdog wrote: »

Ofgem haven't opened an investigation yet according to post 124, they are just considering it. Perhaps E.on could do the decent thing and change their policy before the investigation is opened

It would be a pity if there was no investigation.

Ofgem ask specifically (and only?) about E.ON but in my personal experience Edf also operates a short first year "spring alignment" policy not obvious from online pre-contract information.

In practice Edf has played "soft-ball" with respect to incorrect (or random) recalculation but I cannot say that extends to "correct sudden excessive hike" recalculations, excessive by virtue of the "short year".

MisterCee72

Morning all

A couple of updates from me on this.

Was informed yesterday that Colin Urquhart has left Consumer Focus. However, from the latest Ofgem post, there would appear to be no lack of continuance with what CF started on this issue.

Further to the networking/lobbying effort made with the reset council members and programme manager, I received a call from Darren Cornish, Head of Residential Business at E.ON yesterday afternoon.

Without wanting to presume or predict anything about the outcome from the ongoing reset review, I am pleased that they appear to be on point with some of the basic concerns that I and many of you share on their direct debit policy, both in terms of how it functions and how it is communicated to their customers.

Darren committed to get an update onto this forum within the next 7-10 days. Given that it's not the quick touch post that some are seeking, I would hope that their next post will be meaningful and at least manage people's expectations, if not yet being able to match or exceed them. Communicating better should be the bare minimum that they ought to be doing right now.

Whist the onus is on E.ON to get things right going forward, if they have to account for their actions back over to CF or Ofgem, then they are surely big enough as a company to deal with any redress that is required of them by the regulators.

DirectDebacle

Blackdog wrote: »

Ofgem haven't opened an investigation yet according to post 124, they are just considering it. Perhaps E.on could do the decent thing and change their policy before the investigation is opened. It would save everyone (including E.on) a lot of time, stress, money and effort.

My guess is that they will do precisely that. I wouldn't be surprised that since their Feb announcement of policy change they have gone back to the 1/12th scheme. No skin off their nose as the sping balance months are almost here and so during that period new customers would be on a 1/12th scheme in any event.

Ofgem have previous for excercising leniency where a supplier can show they have identified a problem and allegedly taken steps to put it right.

My view is that in this instance such an approach would not be in the interest of consumers.

Since the introduction of their policy in 2009, E.On appear to have been in breach of guidelines and licence conditions in order to advantage themselves at the expense of their customers.

Ofgem should be sending a message to all suppliers that such behaviour is unacceptable. They should use E.On as an example and fine them at least £2m on each breach of regulations they find plus some more on top.

As long as it is economically viable for suppliers to knowingly breach regulations then they will continue to do so. Ofgem are not a toothless regulator, they just haven't learnt how to bite.

Consumer_Futures_Representative

Hello everyone

I’m writing from Consumer Focus to update everyone on the issue of E.ON’s policy around monthly Direct Debit payments, specifically its ‘Spring Review’ practice.

To confirm, Consumer Focus have passed all the evidence we received to Ofgem, which includes all of our correspondence with E.ON. Ofgem informed us that they are now reviewing the matter so Consumer Focus has halted our investigation. There is a formal memorandum of understanding between our two organisations that ensures we don’t duplicate each others’ efforts, such as carrying out separate investigations into the same issue. Ofgem, as the regulator, has additional powers including the ability to levy fines for breaches of a licence condition.

We urge any MSE members who remain concerned about E.ON’s direct debit policy to send your evidence to Ofgem. Please contact [EMAIL="consumeraffairs@ofgem.gov.uk"]consumeraffairs@ofgem.gov.uk[/EMAIL] and mark emails “for the attention of the Enforcement and Competition Policy Team”.

Once again, thank you for your input and comments. The evidence from MSE members has been vital at driving this issue forward.

Consumer Focus Energy Team