MSE News: Eon shakes up direct debits to stop bill shocks

DUTR

deannatrois wrote: »

I ended up being asked by Eon for payments of £550 a month because I had built up a debt of £1,400 over 11 months. My meter had been read twice during that time. In the end I sold my car, paid off two thirds of the debt and agreed to pay £128 a month and lowered my useage of utilities to a minimum. I then left Eon when I moved, and went on a prepayment meter because of the stress caused by this system. I have no car now so goodness knows what I would do if the same thing happened again. The effect was MAJOR as on a prepayment system, I am not able to get any favourable tariffs and what i feed into the meter is alarming, in spite of being cold most of the day and unplugging everything I am not using. Without selling the car, I would have had to pay a minimum of £350 a month. Unbelievable!

You say that, but your monthly payments prior to that, you must have suspected them to be too low, my colleague showed me her EON bill increased to £269 per month, however before that was paying under £80 which was obviously too low, it sems that they were charging for electric only and the gas was permanently in arrears, she has squared up the arrears (with less drastic measures than you had to) but is now going to switch, it was only at that point the rep 'realised' the real payment should have been around £150, still too late now.

molerat

With E.on on line management you can :

Submit your own readings and get a bill virtually whenever you want.

Submit your own readings and get an immediate balance of your account, again virtually whenever you want.

Change your direct debit several times a year.

View what E.on think your direct debit should be at any time you want.

With a simple spreadsheet I am currently forecasting my account balances to July 2013 and expect my April 2012 balance to be around £70 CR, April 2013 is currently looking like £5 DR. Not rocket science.

backfoot

Eon were asked on two other threads how the announcement for DD's differred from the previous system.

It is a simple question affecting all current and potential Eon customers.

Previously,during lengthy dialogue with the MSE Eon Reps they provided details which showed that contracts starting late year were already spring aligned more than 12 months ahead.

The heart of the problem for customers did not lie with this but that that any non 1/12th system gives rise to a premium payment amount to cover short year reconciliation. This is particularly acute following price rises or review following short term consumption changes. The system, even when extended over say 15 months, captures two peak winter periods.

The proposed system does not appear to be any different and will not address the problems.

Eon said as part of their Reset Inititiative :

Energy is one of life's essentials - not a luxury. That's why it's so important that people can trust those who supply a product they depend on totally. We have colleagues who work hard day in, day out to provide electricity and gas for our customers, and to help them with their energy needs. However, as an energy company, we need to recognise that we've allowed a situation of mistrust to develop because much of what we do appears complex and confusing to our customers.

By refusing to explain to all the readers/customers/potential customers some of the detail behind this Press Announcement it appears that Eon's Reset Inititiative has failed at the very first hurdle.:o

jalexa

backfoot wrote: »

The heart of the problem for customers did not lie with this but that that any non 1/12th system gives rise to a premium payment amount to cover short year reconciliation. This is particularly acute following price rises or review following short term consumption changes. The system, even when extended over say 15 months, captures two peak winter periods.

The proposed system does not appear to be any different and will not address the problems.

All true.

Let me quote an extract from the E.ON press release, and explain why it has fooled many who really should not be fooled quite so easily.

However,customers who joined the company in the second half of the year told E.ON they were unhappy as they had not been able to build up enough credit over the summer months to cover their higher winter energy use. This meant some customers needed to pay is proportionately high monthly Direct Debit amounts for their first few months after joining E.ON.

E.ON has therefore changed its Direct Debit process so that any customer who joins in the second half of the year is given up to 18 months to get their DirectDebit accounts to a zero balance.

I reviewed the "Twitter table" this morning. It is true that the Twitter table indicates 6 months to annual review for December starts and the new policy promises "up to 18 months". Slightly weasily worded but never mind. The customer concern cited was "not been able to build up enough credit over the summer months to cover their higher winter energy use". Except look at the table. For every month started the payment is sufficient to achieve balance by the (June) annual review tabulated. So what is the problem?

Well several. The short term recovery you point out. But there is something much more fundamental and Consumer Focus (by virtue of their advocacy of switching and their authorship of the Confidence Code) are implicated up to their necks. The initial monthly payment set must be passed to the gaining supplier and must be implemented - otherwise the Consumer Focus accredited comparison, on which a contractual "offer and decison" is based cannot be valid.

While informed switchers may well enter accurate annual consumption, some switchers enter monthly payments - as permitted by the Consumer Focus accredited comparison, other switchers may enter "typical" annual consumption - as permitted by the Consumer Focus accredited comparison. While "not right", I do not think that is unreasonable behaviour by laypeople.

The "Twitter table" short year payment schedule only works for accurate consumption. At the first "interim review" the supplier, now armed with industry provided consumption for the previous 12 months, proceeds to a very short year review - without (certainly in the case of Edf) informing the customer that the consumption assumption has changed - and to what figure, (in the case of Edf incorporating a 20% excess from previous exceptionally severe weather).

These are fundamental process issues which result directly from an accredited industry switching process and which the recent gushing Consumer Focus press release is silent about.

Unless the Consumer Focus rep wishes to clarify.:D

backfoot

Jalexa,

Correct and an important scenario. It is that first review which rightly would attempt to get a customer's payment scheme back on track.

However,the Eon customer is given only till the spring to recover the catch up rather than a full twelve month period.

The inflexibilty of a fixed date being the problem highlighted for Eon's consideration but they haven't listened.

Reset ?

MoneyMiser

Last year I was paying £40 a month DD, in September I rang Eon to say I wanted to put this up to £70 a month to get ready for the winter. The lady was very shocked and laughed saying she never gets calls like this.

My meter was read in December then I had a letter from Eon in January saying they would be putting my bill back down to £41 a month. Now the cold weather has hit, they will probably send me a letter saying I'm not paying enough!

eezyrider7

I joined EON in April last year and was paying £85 per month. In November I was £150 in credit so imagine my surprise when they increased my payments to £134. I phoned and complained and was told this was to cover my winter usage. As they refused to reduced my DD I asked for my £150 credit back which I got, however EON retailiated by putting up my DD to £186!!!

I was on the phone to them on Tuesday getting my credit back again and asked for a review which I was told showed it could only be reduced it £172 but they couldn't even do that if I withdrew my credit. I explained to the girl that my current usage averages out at £91 per month and asked for a justification for being charged twice that.

To cut a long story short I am getting my credit back and will probably have to go through this pantomime every month until I switch providers. I can't see this announcement changing anything.

EZ

jalexa

eezyrider7 wrote: »

I can't see this announcement changing anything.

Given that the announcement included "E.ON has therefore changed its Direct Debit process so that any customer who joins in the second half of the year is given up to 18 months to get their Direct Debit accounts to a zero balance", and you joined in April, you are probably right.

It is hard to tell from the payment amount only, but my gut feeling is that just under two payments in credit by November for an April start *probably* indicates an insufficient monthly payment, but whether the E.ON calculation is correct is an entirely different matter.

Could you please obtain from E.ON your *exact* "annual review" date and post the answer. That would be very useful to the ongoing debate.

Later edit:
How was the initial monthly payment calculated?

shimmeringsky

eezyrider7 wrote: »

I joined EON in April last year and was paying £85 per month. In November I was £150 in credit so imagine my surprise when they increased my payments to £134. I phoned and complained and was told this was to cover my winter usage. As they refused to reduced my DD I asked for my £150 credit back which I got, however EON retailiated by putting up my DD to £186!!!

I was on the phone to them on Tuesday getting my credit back again and asked for a review which I was told showed it could only be reduced it £172 but they couldn't even do that if I withdrew my credit. I explained to the girl that my current usage averages out at £91 per month and asked for a justification for being charged twice that.

To cut a long story short I am getting my credit back and will probably have to go through this pantomime every month until I switch providers. I can't see this announcement changing anything.

EZ

I have been with EON a few years and had no problems until the last 12 months, whilst I am in credit in the summer months I was in a slight debit the winter months (so never felt i owed anything as i knew by the summer the debit would be rectified ) , However due to pressure I increased my payments and have remained in credit throughout the year and EON decided they were going to increase my DD further by approx £40 a month. I rang them, they told me the best they could do would be an increase of £35 per month. I refused on principle that I had been in credit for 12 months ( funnily never offered anything back !) so i cancelled my direct debit and have set up a standing order instead for what i believe i should pay. My recent bill in Jan i was still in credit. I am aware my credit will not last forever and i will just increase my standing order accordingly when my credit ceases to exist.

pelirocco

Eon rang me a few weeks ago to put my DD down , we had been paying £250 / month , its now £189/ month , I am aware that quite a few people on this site will consider that a lot , ( and it is ) I submit regular readings online and ask for updated bills and am trying to get the payments lower ............by using less fuel . I am always surprised by people who say they switch suppliers because the monthly dd are lower ,with out seeming to realise thats its not so much the amount you pay per month , its what you use ( and at what price ) !

I have always found Eon to be pretty accurate with their estimate to what we will use over the year