EON raising direct debits for no reason

Sera200

In October I was over £240 in credit and paying £133 for my monthly direct debit.
I have never used more gas and electricity than this in a month. Eon contacted me and made me put my direct debit up to £178 per month. I can not understand why. On putting in a complaint they said it was my fault for not checking my direct debit. How many more customers have they done this to over winter? Why are they allowed to take a customers money with no reason, there was no proof I would use this amount and I was already in credit. Yes Eon have paid it back to me now when I asked but how many more customers have they done this too through winter?

DirectDebacle

Welcome to MSE and thank you for your post.

You may find this thread https://forums.moneysavingexpert.com/discussion/3629707 a useful one to read. It was started by E.On themselves in order that they can help and explain their actions to customers. An E.On rep (there are four of them) may offer you assistance. Copying and pasting your post to this thread might be a good idea.

Have a read of the thread as it goes into their 'spring zero balance policy' which may have affected your DD payments.

Also this thread https://forums.moneysavingexpert.com/discussion/3686969 by Consumer Focus which sets out their interest in E.On DD practices.

Tip. Before starting a thread do a thread search for existing threads similar to the subject you are considering to post on.

backfoot

There are numerous threads and volumes of similar complaints on Eon and Direct Debits. Do a search. A number of posters have raised the issue with Eon and Ofgem.

It will be interesting to see if Eon offer any reasonable explanation to you here.

Please follow DirectDebacle's good advice.

Despite knowing about this issue for some time, Ofgem have let this issue and other supplier Direct Debit abuses to develop with complacency and indifference. Having introduced a new regime in 2010 they have simply not enforced their own simple regulations. (SLC27)

The pressure is on Eon to explain their policy. Your formal complaint to them and consumer focus will add to their discomfort.

lithopsian

That's pretty dumb. Their own policy is to review direct debits on the spring bill so there needs to be a very good reason to change one in October. They messed up, as shown by the fact that they paid it back.

Legally, they are entitled to take anything they want from you following the agreed written notice (I forget exactly how long, but basically enough for you to stop if it necessary). That's what a direct debit is and if you don't like it then you need to pay a different way. In the case of the energy companies they are all supposed to have clear written policies for how they calculate and set the direct debits, so you have a cast iron case if they try to change it without following that policy. Of course it is far simpler to keep an eye on your bills and put a stop to any funny business before they take the money. As you've probably found out, going through the complaints procedure is mostly a waste of vast amounts of paper and hot air

backfoot

lithopsian wrote: »

Legally, they are entitled to take anything they want from you following the agreed written notice (I forget exactly how long, but basically enough for you to stop if it necessary). That's what a direct debit is and if you don't like it then you need to pay a different way.

What law ?

Aren't they obliged to abide by their Standard Licence Conditions?

If it is not a Contract Term how can they enforce it?

lithopsian

backfoot wrote: »

What law ?

Aren't they obliged to abide by their Standard Licence Conditions?

If it is not a Contract Term how can they enforce it?

You may have a rose-tinted view of the direct debit system. Or perhaps you are just pointing out that the amount the company is entitled to take from your account is limited to what they are legally entitled to. However, what they are legally entitled to is defined in the first place by what they print on a piece of paper (or simply online) and send to you. If you don't dispute that amount before it is withdrawn then your bank will not refund it under the (toothless) direct debit guarantee even if you believe the bill was incorrect.

Additionally the highly regulated energy companies ought to follow their own written direct debit policies, which themselves should be in compliance with their license terms. As we both know, in practice if they notify you that your direct debit amount is changing and you don't dispute it up front then they will take it from your bank and your bank will not help you. This is entirely legal and your recourse is through complaints procedures and the ombudsman rather than through the courts. A notification of even a stupid monthly direct debit change that you do not dispute becomes your new contract terms.

In the simpler case of standard quarterly billing, if an energy company sends you a bill for however many thousands of pounds then that is how much money they will get from your bank a week or two later. It would need to be an extremely clearcut case before your bank itself would reverse that payment, for example the payment not matching the bill. If the bill is simply wrong such as the common metric/imperial issue then you will have to fight it out with the energy company.

My advice is always to check up front because it is such a pain once the money is gone. If you dispute a direct debit as soon as you receive notification then the company loses their legal right to the money and you always have the nuclear option of just cancelling the direct debit. Note that you may still have a legal obligation to pay the money, simply that you can withdraw the right (at any time) for them to claim it by direct debit.

jalexa

lithopsian wrote: »

If you dispute a direct debit as soon as you receive notification then the company loses their legal right to the money and you always have the nuclear option of just cancelling the direct debit.

That is a very simplistic view which may not be risk and cost free.

If the account holder unilaterally withdraws from a direct debit payment arrangement any direct debit discount will be lost. In addition the supplier may revert to a standard quarterly billing arrangement which requires to be settled quarterly in full.

lithopsian

jalexa wrote: »

That is a very simplistic view which may not be risk and cost free.

If the account holder unilaterally withdraws from a direct debit payment arrangement any direct debit discount will be lost. In addition the supplier may impose a standard quarterly billing arrangement which requires to be settling quarterly in full.

Someone attempting to take more money than you have, or money that is required for something like a mortgage, is neither risk nor cost free. However it is always an option that you have as a last resort. Of course you will have discussed with the company that you do not agree to their attempt to change your payments so it is only after a complete breakdown of communication that it should get that far. I would assume that once you reach that stage you will be switching suppliers anyway.

backfoot

lithopsian wrote: »

However, what they are legally entitled to is defined in the first place by what they print on a piece of paper (or simply online) and send to you.

Additionally the highly regulated energy companies ought to follow their own written direct debit policies, which themselves should be in compliance with their license terms.

Really? What legal authority does that come under? Just taking a DD amount doesn't make it legal. I agree stop it at source if you can, but that is a different matter to legality.

Shouldn't there be a contract term,relating to the basis of the DD? If there is a contract term but it is not fair then you have rights under consumer protection legislation.

If they aren't compliant with their Licence Conditions you can win a case for lost discounts, overdraft charges, other costs and expenses plus compensation via the Energy Ombudsman. IMHO Eon's scheme and associated processes are not compliant with SLC27.

If they breach their Contract you can win a case in court. Eon's complicated DD scheme is not explained in their T&C's and if they change a DD amount without explanation , they are automatically in breach of SLC27. Breaching an overriding Licence Condition would be conclusive evidence of taking an unauthorised amount,particularly without a term explaining what their scheme is. Relying on ill defined and confusing website descriptions wouldn't stand up. Any losses incurred would be reclaimable by the customer.

I personally would favour the Energy Ombudsman route as it has the least up front costs to pursue and the better likelihood of compensation for inconvenience and time spent pursuing it.

E.ON_Company_Rep_Chris

Hi Sera200

Welcome to the forums

I’m sorry that its concerns about the way we’ve calculated your payments that have prompted you to join. As the others have pointed out, we’re currently reviewing our Direct Debit process to help other customer’s with similar concerns.

£45.00 a month is a big jump in your payments so I can see why you’re worried. It also sounds like that you didn’t know that your payments had changed until you checked your bank account. We do tell you on your bill and send a letter with some information on how our Direct Debit scheme works.

I’d like to check a few things with you and see if I can help explain what’s happened.

How long have we been your supplier?
Was the £240.00 credit your balance immediately after we sent the October bill?
If yes, had we billed to accurate meter readings? Had we estimated any previous bills last year?
Has your tariff changed recently or did your electricity prices go up in September?

All of these things impact on the amount you need to pay and how this is calculated but here’s how it works:

If we reviewed your payments after this October bill then I expect that your Spring Review date is April. This means that we forecast how much gas and electricity you’ll use from your October bill to your Spring review. We normally base this on your use from the same period last year, as long as we were supplying you then.

We take your credit balance and any scheduled payments off the forecasted amount, then divide what’s left, by the number of payments to your April bill. This is so that when the year starts again, you have a zero balance and only have to pay for your average monthly use rather than any arrears from the previous year.

If you’d like me to check your account to make sure that lowering your payments again following your complaint doesn’t result in problems next month, then you can send me an email to the address on my profile.

This may not be the case as we’ve reduced our electricity prices recently and that will help keep the payments down

I hope this helps a little Sera, let me know if there’s anything else I can do.

Amanda

DirectDebacle

E.ON_Company_Rep_Amanda wrote: »

Hi Sera200

Welcome to the forums .....

Amanda

£45.00 a month is a big jump in your payments so I can see why you’re worried.
It also sounds like that you didn’t know that your payments had changed until
you checked your bank account. We do tell you on your bill and send a letter
with some information on how our Direct Debit scheme works.

A 34% jump. The OP knew in October that the account showed over £240 credit. The OP knows the DD was @ £133 per month. The OP knows that their combined monthly cost of fuel usage has never exceeded that amount.

E.On, without explanation*, notified the increase of the DD to £178.00.

Eon contacted me and made me put my direct debit up to £178 per month.

It sounds like the OP knew the DD changed because the information came from E.On, not through checking bank accounts.

*There is some explanation. Why was the partial information given insufficient to explain to the OP the reasons for raising a DD by 34%?

Why is information withheld from the OP. What information is withheld?

If we reviewed your payments after this October bill then I expect that your Spring Review date is April. This means that we forecast how much gas andelectricity you’ll use from your October bill to your Spring review. We normally base this on your use from the same period last year, as long as we were
supplying you then.

Why would you expect the balancing date to be April? That seems to be at odds with the Twitter table.

What is the criteria that dictates an April, May or June balancing date?

According to E.On website there are two DD schemes. Fixed and variable. Variable does not attract a DD discount.

A customer who joins E.On outside of the spring balancing months, has their initial DD set at 1/12th of annual cost and then has it varied wholly or in part to be spring aligned, is not on the fixed DD set on sign up.

E.On variable DD requires outstanding amounts be paid 10 working days after sending a bill. This scheme is not designed for the spring zero balance policy either.

So what is the DD scheme customers are on called and where is it described? Should it not carry, at least for the first year, an enhanced DD discount to reflect the advantages for E.On and the disadvantage caused by forcing it upon some customers?

Why hasn't the E.On press the reset button thread been updated.