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

E.ON_Company_Rep_Chris

xellieqx wrote: »

So glad this is happening to other people, I almost had a panic attack on Friday when I got a letter saying my DD was increasing from £40 to £343 a month. It's still worrying me now, but reading through this makes it much more simple to digest. Should I email consumer focus to let them know I am another one of many?

xellieqx wrote: »

We've had some trouble with our meter in the past, as the previous tenant in our apartment didn't pay their electricity bill, then the meters were read wrong, so we've been paying much more than we thought necessary due to the initial confusion, and that the advisor at Eon told us that'd be a reasonable amount to pay via DD... so when we got the letter, I was quite flabbergasted, as there is only 2 of us living in a small, 1 bed flat property, are out most of the day, put a jumper on instead of the heating etc.!
Whilst I can appreciate that there might have been overspend due to cold weather and having the heating on every now and again, I did not expect it to be that much.
We opened the account in May last year, not sure if that's relevant?

Hi xellieqx

Just want to point out that not all DD changes are due to spring review dates.

The previous problems with your meter could easily be the issue here, or that the DD was set much too low when you moved in and you've built up a large debt.

Either way, something doesn't sound right. If you haven't already contacted us about this please do, so that we can look into it for you.

Thanks

Amanda

xellieqx

Hi Amanda,

Thanks for your response - have left it in my boyfriend's hands now, but I'll let him know what you've said.

poet123

In my case the £200 pcm that we were paying covered our usage fully with EDF, fast forward to now, and an EON rep worked out on Sunday that on current usage and given the 20% increase, we should pay £230pcm to fully cover our usage.

This amount vindicates the figures I input, as with a 20% increase over the period our usage would be £240 currently, so we are clearly using slightly less fuel than we did before switching. Therefore it is clear that the debit has accrued purely because they set the DD artificially low to gain our business.

backfoot

After referring this issue to Ofgem around three and a half months ago I followed it up again this morning.

I had a useful discussion with a lady within their Consumer Policy and Insight Team and explained the history to date. This included reference to this thread and Ofgem will look at it and hopefully the other connected threads.

The initial response to me was that Ofgem have recently issued a leaflet regarding Direct Debits. I had seen that document and while it is a helpful summary of the whole area, it in no measure addresses the main issues of concern around Eon's Policy. I sincerely hope that Ofgem aren't complacent enough to believe it is a sufficient response.

The areas of concern are well documented but in summary :

1. The short year recovery of amounts to acheive a zero spring balance penalise customers unfairly.

2. Eon fail to explain their policy fully and clearly to customers at the outset of a contract and hit them later with punitive DD hikes.

3. Eon fail to fully and adequately explain their calculations when there is a change. (in breach of SLC27).

I am expecting a further response later today from Ofgem with more detail. I wanted to bring this thread back to the top of the Forum so that they can easily identify it and the main contributors, which include Consumer Focus themselves.

backfoot

I have had a further discussion with Martin Abraham of Ofgem regarding Eon's DD policy.

It is clear to me that Ofgem recognise and understand the complaints that have been made and are supportive of our customer based campaign.

Without me, fully understanding why, Ofgem say they are constrained from direct comment because of various protocols which exist. That is tied in with Enforcement Regulations and current proposals /initiatives under the ongoing Retail Market Review.

It is also true to say, that Consumer Focus and Ofgem try not overlap their roles and as there is a current investigation, then that should run its course.

So while I am left somewhat frustrated that, at this stage, Ofgem won't directly intervene, I am encouraged that they have heard the representations and appreciate that they are serious and ongoing matters.

I am also pleased to hear that CF are still looking at the issue and that Eon themselves have made some noises, that this is under Review within their 'Reset' Initiative.

Eon would do well to listen to and react properly and swiftly to the genuine customer concern regarding their policy and their procedural non compliance with SLC 27.

Blackdog

Well done backfoot, your efforts in trying to get this resolved are really appreciated.

backfoot

Thank you Blackdog. I am sure you will also recognise DirectDebacle's considerable efforts.

Although, we are still hopeful of a positive outcome,there is probably little more we can specifically do until we hear back from CF/ Ofgem.

What would still help the situation is for more detail of the impact to be passed to CF by customers affected.

Unfortunately,neither DD nor myself were directly affected as Eon customers, so we couldn't pusue the matter with our own live examples. Nevertheless, as Campaigners for fairness I feel we have had our concerns aired and widely listened to.

Over to you Eon.

Blackdog

backfoot wrote: »

Thank you Blackdog. I am sure you will also recognise DirectDebacle's considerable efforts.

Although, we are still hopeful of a positive outcome,there is probably little more we can specifically do until we hear back from CF/ Ofgem.

What would still help the situation is for more detail of the impact to be passed to CF by customers affected.

Unfortunately,neither DD nor myself were directly affected as Eon customers, so we couldn't pusue the matter with our own live examples. Nevertheless, as Campaigners for fairness I feel we have had our concerns aired and widely listened to.

Over to you Eon.

Oh yes, our thanks are of course extended to DirectDebacle and everyone else who is contributing to this campaign. I did contact Consumer Focus direct and would hope that Eon would now see the light and review their policies.

DirectDebacle

Blackdog wrote: »

Oh yes, our thanks are of course extended to DirectDebacle and everyone else who is contributing to this campaign. I did contact Consumer Focus direct and would hope that Eon would now see the light and review their policies.

I am sure Consumer Focus have taken your complaint on board. As a result of the campaign so far E.On are reviewing their policy and have I belive already taken some action. I mentioned this last week in post #59.

I was hoping that either C.F. or E.On would provide this update. I provide an extract below which an E.On rep can either confirm or deny.

".......The company has come back to us again admitting that they have significant issues in the detail of how their direct debit scheme works, and as part of their ‘Project Reset’ they have set up a review of the scheme to ensure that the issues experiences by customers (as illustrated in the MSE threads) do not continue.

As a means of avoiding further issues in the short term they have switched off their automated quarter 1 payment adequacy review where the increase is under £100.

I think this is a move in the right direction, as they are now admitting that there are problems with the scheme.


We will continue to engage with them....... "

Of course the issue is far from over. C.F. have no enforcement powers and any change E.On agree will be voluntary and could be reversed whenever they chose to.

A similar policy could be adopted by any other energy company and a fresh campaign would have to be initiated. The solution lies with Ofgem and one solution would be to make the original DD scheme the default DD offered on all tariffs where payment by DD is an option. Schemes such as E.Ons could be offered as an additional option and customers would be able to choose that if it was suitable for them.

One difficulty we have at the moment is persuading Ofgem to examine the E.On issue.

Backfoot has brought it to the attention of Ofgem and they are aware that there is a problem. I suspect they are waiting for a report/complaint from C.F. when discussions between E.On and C.F. are concluded.

AFAIK Consumer Focus are still very light on actual complainants and without them cannot present a strong case for Ofgem to investigate.

To that end I urge anyone affected by this zero spring balance practice/policy to contact C.F. with the details. Those who have posted on the many threads on this issue and have switched supplier because of it, should not leave it at that but contact C.F.

It matters not whether you were adversely affected by it, if you accepted it or not or complained about it. C.F. can present to Ofgem evidence of how such a policy impacts customers in different ways and how E.On dealt with any complaints they received.

As you are aware The Times ran a story in last Saturdays edition (27/1). I understand that this has generated interest and readers who are customers of E.On have come forward with their experiences. I expect that in the coming weeks there will be further and harder hitting articles than the first one. This will put E.On in the spotlight as well as DD problems and apparent breaches of SLC 27. and may well concentrate the attention of Ofgem.

The matter is certainly not finished yet but requires more involvement from E.On customers to keep up the momentum.

poet123

Sorry, not having been here from the off, but could you clarify what SLC 27 is and what it states? I am in the complaints stage with EON re incorrect setting of DD at the outset of my contract.