Is this even legal

wedgehog

Hi all, I have my gas and electricity with Ovo and I have always been in credit, the other day I received an email saying they were reviewing my direct debit and showed a calculation which showed my current credit as £180 and then worked out 12 months payments at my monthly rate and told me I would be still £87 in credit by the end of the year, therefore they want to INCREASE my debit by nineteen pounds a month? :mad:

I wrote to them and they gave me the usual complicated BS about how they work it out but what worried me is in their email they state that THEY require me to be one months money in credit constantly which means I lend them one months money constantly year after year, is this even legal? I thought the whole point of direct debit when it came out was to make it easy for suppliers to just take payment when it was needed, so why don't they just take the amount of the bill each time it's due without hoarding our money for their own use without our permission

yangptangkipperbang

wedgehog wrote: »

which means I lend them one months money constantly year after year ..............I thought the whole point of direct debit when it came out was to make it easy for suppliers to just take payment when it was needed, so why don't they just take the amount of the bill each time it's due without hoarding our money for their own use without our permission

You're missing the point completely............

DD has two main purposes:
1. It gives the supplier some assurance that they will be paid for the gas/electricity that they are supplying you with, and gives them a steady, regular income.
2. It enables you to know exactly how much you will have to pay out every month.

You are not providing them with a free loan anyway. In the summer they will be in "pocket" - in the winter you will be. Over the year it will balance out.

If you want to pay a bill as it becomes due you can. Then you will get a £250 bill in the summer and a £800 bill in the winter. The choice is yours !

If you don't like DD - don't use it...........

wedgehog

No it's you who is missing the point completely, if they state that I have to constantly be one month in credit, that means all year, how is it possible in winter for me to be in pocket, Maths was never your strong point then?

Cardew

wedgehog wrote: »

I thought the whole point of direct debit when it came out was to make it easy for suppliers to just take payment when it was needed, so why don't they just take the amount of the bill each time it's due without hoarding our money for their own use without our permission

If they took the money by DD every time the bill was due, it would mean you getting 3 months gas/electricity without payment.

The whole point of a Utility company DD is to spread the annual bill over 12 months. Thus you need to be well in credit now to emerge from winter without a large debit balance.

They do indeed 'have your permission' when you signed or agreed the Direct Debit mandate.

You think you should be able to have 3 months gas and electricty(which could be many hundreds of pounds) without paying for it until the end of the quarter; so effectively owing that money, but consider it unfair if you are in credit at any point.

As said above you can go to another supplier and pay quarterly, but you wont get the DD discount which is a lot more than the couple of pounds interest you will gain.

McKneff

Its the same with a lot of things, telephone is paid in advance, part of a sky bill is paid in advance.

The worst this is these savings stamps you get in supermarkets, customers are giving these people millions of pounds up front, they are getting the interest on it which follows that they are saving more on not paying interest on this multi million pound load Utter madness.

jalexa

wedgehog wrote: »

... what worried me is in their email they state that THEY require me to be one months money in credit constantly which means I lend them one months money constantly year after year...

You need to go through this (quite comprehensive) description line by line and work out for yourself.

http://www.ovoenergy.com/wp-content/uploads/2011/06/Understanding_the_link_between_your_Direct_Debit_and_energy_consumption.pdf

I read through it quickly and didn't notice "constantly 1 month in credit". Post if you notice it.

If you are told anything by phone or letter not clear in the procedure raise a complaint.

"Legal" is a bad word to use. There are regulations which apply (notably SLC 27.15). The calculation must comply and they should comply contractually with their own procedure above otherwise you have grounds for complaint.

The projected annual "cost" that the supplier expects you to use is based on the kWhrs they expect you to use. Do you agree the kWhrs figure is a reasonable projection? How does it compare with your previous annual consumption?

patman99

If you are in credit with any utilities company, then the Law allows for you to request that they refund the surplus back to your account.

Personally, I let it build-up as it then offsets any larger than normal bills. With BT, they wait until I'm 3 months in credit, then stop taking any payments until I have caught-up.

DVardysShadow

Cardew wrote: »

They do indeed 'have your permission' when you signed or agreed the Direct Debit mandate.

Nope. A Direct Debit Mandate is an authority to collect agreed amounts from a bank account. Absent an agreement to for amounts to be collected, the Direct Debit Mandate might facilitate the taking of money, but the Mandate does not constitute an agreement - otherwise it is a carte blanche for suppliers to charge what they like and empty peoples' bank accounts at will.

The supplier needs to agree the amounts with the customer.

Jamie_Carter

yangptangkipperbang wrote: »

You're missing the point completely............

DD has two main purposes:
1. It gives the supplier some assurance that they will be paid for the gas/electricity that they are supplying you with, and gives them a steady, regular income.
2. It enables you to know exactly how much you will have to pay out every month.

You are not providing them with a free loan anyway. In the summer they will be in "pocket" - in the winter you will be. Over the year it will balance out.

If you want to pay a bill as it becomes due you can. Then you will get a £250 bill in the summer and a £800 bill in the winter. The choice is yours !

If you don't like DD - don't use it...........

You have missed the point.

The DD payments should work out at about the average for the twelve months. So in thory at the end of the twelve months the account should be at £0

Jamie_Carter

Cardew wrote: »

If they took the money by DD every time the bill was due, it would mean you getting 3 months gas/electricity without payment.

The whole point of a Utility company DD is to spread the annual bill over 12 months. Thus you need to be well in credit now to emerge from winter without a large debit balance.

They do indeed 'have your permission' when you signed or agreed the Direct Debit mandate.

You think you should be able to have 3 months gas and electricty(which could be many hundreds of pounds) without paying for it until the end of the quarter; so effectively owing that money, but consider it unfair if you are in credit at any point.

As said above you can go to another supplier and pay quarterly, but you wont get the DD discount which is a lot more than the couple of pounds interest you will gain.

Most direct debits are monthly, not quarterly.

Jamie_Carter

The OP should change supplier.

I'm with British Gas at the moment. They actually charged me too little to start with, so now my account is way in debit. So today they have increased the DD to gradually bring the balance down. But they haven't done this by much, so it will take over a year.