EDF Fail Ofgem Direct Debit Rules

jalexa

Terrylw1 wrote: »

What you need now is someone starting a thread about a non disclosed method of calculating the DD in a <12 months scenario

I completely agree with that. I'm not of the opinion (or interpretation) that the regulations require the equivalent of the "annual statement" at less than 12 months and the annual review calculation with 12 months of readings is or should be an easy calculation. Yes it needs transparency and Edf have been unable or unwilling to provide that transparency, though not unwilling to reinstate the previous payment if there was a customer case from the calculation.

IMO SLC27.15 is the fundamental issue which needs pursuing, "the licensee must take all reasonable steps to ensure that the fixed amount of the regular direct debit payment is based on the best and most current information available (or which reasonably ought to be available) to the licensee, including information as to the quantity of gas which the licensee reasonably estimates has been or will be supplied".

The Edf practice for the <12months scenario has been to unilaterally use the previous annual consumption passed by the previous supplier subsequent to agreement on the initial fixed regular DD payment at switch time even when regular customer reads have been submitted. I believe that completely undermines the "12 month" principle of the Consumer Focus accredited comparison (as well as SLC27.15). Terrylw1's sterling contribution indicates that there is already a sophisticated industry estimating mechanism which Edf would appear to be ignoring for the short first year calculation scenario.

And for the reason I have previously posted, artificially contriving a "short first year" from the meter reader cycle.

backfoot

snowcat53 wrote: »

The EO rep kept emphasising they can only deal with individual complaints not policy questions (eg re failure to abide by SLCs) but that Ofgem might notice and take up if a number of complaints were upheld on the same point. I get the impression they realise they have cocked up in attempting to reject this out of hand, and are nervous it could come back to bite them.

They also want to know what resolution I am after . Any thoughts on that?

I think your resolution would be slightly different to mine. In your case,as I recall, they eventually did offer various explanations of the DD revisions ,but you found that each of those explanations, was inconsistent and incorrect.

So, you may seek the following resolutions :

'An adjudication that states;

that EDF failed to provide a clear and understandable explanation of the change in the DD at the time of the change as required by SLC 27.14.

that EDF failed to provide proper explanations of the change upon request on several occasions(dates). The fact that inconsistent explanations were provided proves the point.

that the customer is seeking a goodwill gesture from EDF for failing to provide adequate customer service and adequate explanation for the change in the Direct Debit.

that an apology is provided by EDF.'

I understand that the EO cannot amend policy but they can adjudicate upon matters which are clearly laid out ,in writing, in SLC's. That is the Supplier's obligations and EDF are not abiding by them.

A number of similar cases, might prompt Ofgem to look at consistent breaches of the License. (it is clearly systemic). In addition, continual inadequate Complaint Handling is already an open investigation for EDF. The stonewall approach to our respective complaints will be viewed severely.

If we win our cases,then that will set a precedent for future similar complaints and if EDf do not amend their approach then they will find themselves in much deeper water.

backfoot

jalexa wrote: »

I completely agree with that. I'm not of the opinion (or interpretation) that the regulations require the equivalent of the "annual statement" at less than 12 months and the annual review calculation with 12 months of readings is or should be an easy calculation. Yes it needs transparency and Edf have been unable or unwilling to provide that transparency, though not unwilling to reinstate the previous payment if there was a customer case from the calculation.

IMO SLC27.15 is the fundamental issue which needs pursuing, "the licensee must take all reasonable steps to ensure that the fixed amount of the regular direct debit payment is based on the best and most current information available (or which reasonably ought to be available) to the licensee, including information as to the quantity of gas which the licensee reasonably estimates has been or will be supplied".

The Edf practice for the <12months scenario has been to unilaterally use the previous annual consumption passed by the previous supplier subsequent to agreement on the initial fixed regular DD payment at switch time even when regular customer reads have been submitted. I believe that completely undermines the "12 month" principle of the Consumer Focus accredited comparison (as well as SLC27.15). Terrylw1's sterling contribution indicates that there is already a sophisticated industry estimating mechanism which Edf would appear to be ignoring for the short first year calculation scenario.

And for the reason I have previously posted, artificially contriving a "short first year" from the meter reader cycle.

We are in a two stage process with EDF.

Stage 1 is the non provision of information to explain a DD change. SLC 27.14.

Stage 2 is once an explanation is provided whether it abides by SLC 27.15.

My focus,to date is on stage 1 as without it, it is impossible to determine stage 2.

Of course, EDF, with poorly constructed systems, may deliberately not be providing stage 1 because they know stage 2 is flawed.

I will happily join stage 2 once I have won stage 1.

backfoot

jalexa wrote: »

I completely agree with that. I'm not of the opinion (or interpretation) that the regulations require the equivalent of the "annual statement" at less than 12 months and the annual review calculation with 12 months of readings is or should be an easy calculation. Yes it needs transparency and Edf have been unable or unwilling to provide that transparency, though not unwilling to reinstate the previous payment if there was a customer case from the calculation.

IMO SLC27.15 is the fundamental issue which needs pursuing, "the licensee must take all reasonable steps to ensure that the fixed amount of the regular direct debit payment is based on the best and most current information available (or which reasonably ought to be available) to the licensee, including information as to the quantity of gas which the licensee reasonably estimates has been or will be supplied".

The Edf practice for the <12months scenario has been to unilaterally use the previous annual consumption passed by the previous supplier subsequent to agreement on the initial fixed regular DD payment at switch time even when regular customer reads have been submitted. I believe that completely undermines the "12 month" principle of the Consumer Focus accredited comparison (as well as SLC27.15). Terrylw1's sterling contribution indicates that there is already a sophisticated industry estimating mechanism which Edf would appear to be ignoring for the short first year calculation scenario.

And for the reason I have previously posted, artificially contriving a "short first year" from the meter reader cycle.

Revisiting the Ofgem Factsheet:

'

Information on how your direct debit is calculated

Your supplier should clearly explain this. Suppliers must
take all reasonable steps to ensure that your direct debit
payments are based on the best available information,
for example, on how much energy you have used. If you
are an existing customer, your payments will be based
on energy use over the previous year with adjustments
if there have been any price changes. If you are a new
customer, the payments will be based on a number of
factors including previous meter readings and the number
of rooms and/or the number of people living in the
property.

Information on why your direct debit needs
changing and by how much

If your payments need to change, your supplier must
explain why. If they need to be increased you will also be
notified at least 10 days in advance. However, if you don’t
understand why your payments are increasing don’t be

afraid to contact your supplier and ask for an explanation'

Ofgem's interpretation for customers points to a split between new and old customers. It doesn't define when you move from being new to old, but presumably new refers to new supply applications. EDF review DD's upon receipt of a meter reading. and although a rod for their own back,you would then expect that new data to replace the equivalent period in the new customer calculation. I really doubt that they actually do this or indeed could do it accurately.

Nevertheless, there is the requirement for them to explain what they have done.

In my example, we have only one actual meter read after six months,so that should replace the equivalent six month period in the original calculation.

EDF reduced our DD by 15%. As an elderly customer on a very tight budget, I advised him to use his rights to have this change explained as he is on a fixed 3 year tariff. In addition, EDF had failed to set up a gas DD for the first three months and he had also received a £40 goodwill credit on the account.

The information request, was to establish, what elements had been taken into account to arrive at the new figure. EDF didn't even attempt to answer this question. Even at formal deadlock stage, they refused to do so, citing the irrelevant SLC31A.

SLC 27.14 and 27.15 work together.

If a Supplier does a review then they are obliged to take into account 27.15. i.e. the latest information and to translate that into an updated annual estimate.

Having done a review, SLC27.14 makes it compulsory to explain that change. Overall, that explanation must be sufficient to satisfy the customer immediately and absolutely, if the customer queries it.

EDf have designed their system, probably by default, such that a review on every meter read has placed a huge burden upon themselves. It is a system design error exacerbated by their subsequent complaint handling and obstructive approach to their License obligations. It really couldn't be clearer in the Ofgem Factsheet.

It will be very interesting to see how they handle explanations under SLC27.14 once the more than 12 month period is reached. I will be very surprised if they reveal sufficient information for the customer to be able to determine if SLC27.15 has been followed.This could be tested once a month !

I hope you guys will keep up the pressure.:)

jalexa

backfoot wrote: »

Ha, opportune timing saving me looking for the thread.

You may know I don't 100% agree with your short-year SLC31A argument, however reading through the entire Standard Conditions this morning I wonder if SLC22.9 is relevant to your situation.

Will study your latest post later.

backfoot

jalexa wrote: »

Ha, opportune timing saving me looking for the thread.

You may know I don't 100% agree with your short-year SLC31A argument, however reading through the entire Standard Conditions this morning I wonder if SLC22.9 is relevant to your situation.

Will study your latest post later.

Not sure I follow. What is my short year SLC31A argument?

EDF have said that they are exempt from the Ofgem Factsheet and SLC27.14 due to the provisions of SLC31A. SLC31A only requires the formal annual statement to be produced after 12 months of being a customer.

If such a defence was valid,then a Supplier could make up any value of DD and not have any obligation to explain it to the customer. Similarly,the Ofgem Factsheet would say that if you are a customer of less than 12 months,you can't ask for an explanation of your DD. It says completely the opposite.

EDF's Legal Department were asked by their Customer Services Manager's to come up with a get out to a customer who was quoting legal stuff. They invented the bogus argument hoping it would deter. :rotfl:I have only seen this in my case and it was last ditch argument entered close to deadlock.If they truly beleived it would be written down and enforced from the outset.

Am I missing something?

(Looked at 22.9 but don't think it clarifies things any better than the specific DD rules already do.)

jalexa

backfoot wrote: »

EDF have said that they are exempt from the Ofgem Factsheet and SLC27.14 due to the provisions of SLC31A...

Ah, I read (obviously wrongly but it is what I "read":() that Edf were refusing a "short-year" annual statement. This is your argument but IMO it's a complete red-herring which will only serve to "confuse" others, hopefully not the Energy Ombudsman:D.

But I totally agree the Edf argument you state is absurd and deserves to be tested.

To help you with SLC22.9, it would provide clear documentary proof of your consumption to date to test the "reasonableness" of the projected annual consumption used in the DD calculation (which Edf may or may not be providing:D).

Your Ofgem quoted "if you are a new customer, the payments will be based on a number of factors including previous meter readings and the number of rooms and/or the number of people living in the property" is central but rather vague guidance. What weight to the previous meter readings? Where has Edf captured the number of rooms and/or the number of people living in the property?

And I note the Ofgem guidance does not explicitly say actual previous or industry estimated actual consumption (EAC or similar).

backfoot

Hi jalexa,

I agree that 22.9 could flush out data which has been used by a supplier.

I am trying currently to keep things as simple as possible for the majority of customers. Whenever a Supplier initially derives a DD they have used an annual consumption and used price/discounts/fixed charges/VAT etc to give an annual value. They then divide by twelve.

If they change this DD, they have made an alternative calculation. The variables may be any of the above and as we know, the recovery period can be altered. ( Eon). In my case, the contract was 3 year fixed, so the variables are few.

Why EDF chose not to answer and further obstructed the process by claiming a link to another SLC, is absurd.The data is there, so why would they not want to share it?

Unless it's wrong,which is why we were asking the question, in case it was and left him with a big catch up bill.

We aren't even asking ,at this stage,for the complexities of the source of the data,but simply what it is. Once you get the data, if inclined,a customer then has the right to test it under SLC 27.15.

It's fair to say that the expertise required then would be something Terry or yourself might question, but the majority of customers just want some overall comfort that the values are reasonable.

All of these obligations are matters for the Suppliers to get right and have systems to support them. It shouldn't be for the likes of us to draw this out from them.

What is clearly apparent that EDF have a serious case to answer. What is making it worse for them is the standard of their initial customer service and the ongoing failure to respond when it developed into a complaint.

jalexa

backfoot wrote: »

Whenever a Supplier initially derives a DD they have used an annual consumption and used price/discounts/fixed charges/VAT etc to give an annual value. They then divide by twelve.

If they change this DD, they have made an alternative calculation.

Yes. ISTM there are 2 distinct scenarios, a customer dealing direct and a customer switching using a comparison website. In the direct case clearly the supplier does the calculation. I have previously posed the question in this forum (or elsewhere) who does the calculation for a comparison website switch? I do not recall an authoritative opinion. All I can say is that the annual usage compared became a monthly payment accurate to the £ and subsequently the payment was unilaterally altered on the grounds the projected annual consumption was now different (but without the courtesy of being so informed). For the record I eventually arrived at a short-year (winter weighted) review with a credit balance having insisted (about 5 times) on the original payment being restored. I would say the Edf billing system had been proved "dysfunctional" on calculation.

I remain curious about the Ofgem guidance you quote. I do not believe there is a public domain register of number or rooms, nor (especially) the number of occupants or type of installed heating. If I am right the Ofgem consumer affairs guidance is incompetent. Of course to me that is no surprise.

It will be interesting if Terrylw1 comments regarding house type and occupancy assumptions.

In a way I regret not being in a position to refer a complaint but given I achieved a satisfactory outcome I am not eligible, though woe-betide any Edf slip-ups.:D However I recognise that not everybody might have the necessary expertise and/or tencacity (required), therefore you are right that a simpler process is required for most customers.

backfoot

jalexa wrote: »

I remain curious about the Ofgem guidance you quote. I do not believe there is a public domain register of number or rooms, nor (especially) the number of occupants or type of installed heating. If I am right the Ofgem consumer affairs guidance is incompetent. Of course to me that is no surprise.

Isn't that part of the factsheet concerned with Comparison Websites? From memory,if you didn't have any knowledge of your consumption history,they would ask for details of the size of the property and number of occupants. I always assumed this was to do a best estimate by banding you into low,medium or high usage.