British gas policies??? Massive debt after first year in new house!!

sheppylove_2

Hey guys, i got a letter from BG saying our £60 a month DD was being put up to £317 per month as of the next payment about 30 days away. Anyway i was aware we had been acumulating some debt as we recieve statements and i noted one in summer saying we were £600 in debt, i guessed it would level out over the summer, thats how they are supposed to work right? At the bottom of the statment it says you dont need to do anything just carry on paying your DD.

So we get this letter which says we have a debt of £1300 and they are putting our DD up, i rang them and asked them how this could of happened, the lady said its company policy only to review payments after 12 months. I asked if there was a lot of situations like mine then and she couldnt answer me.

The other really annoying thing was she was obviously told to try and get people with big debts onto a pre payment meter as she kept informing me of how much better it would make the payments, until she said well the meter will take 50% of the money you put in. So i said if my avg usage is £200 a month i would have to put in £400 to keep my house running? She hadn't thought of that and didnt know how to answer me.

I have no problem with the girl on the phone she was just doing her job, i also totally understand that i have used this fuel so must pay for it, but i would like some views on what you think of this review it after 12 months policy? Thanks for reading my very long story, i look forward to your comments.

WestonDave

I guess to a degree both you and BG have been caught out by not having any real idea of what your likely consumption would be when they set the initial DD's. That has been compounded by not reviewing it as billing information came in. Its not really in their interests to get things into this sort of situation because they are now chasing you for money and will be late in getting it, whereas they'd prefer you to be paying more than you use to keep them in pocket.

I have to say though your bigger problem is how the hell you manage to use that much energy per month! Presumably that's for both electricity and gas, but even at £200 a month its almost double a sensible amount.

So in your shoes I'd be looking seriously at how energy is being used, cutting it back savagely and then as the consumption drops updating British Gas with meter readings so that the debt disappears faster (because more of each payment will be going to paying off debt and less going to current consumption).

notbritishgas

£1300 debt plus £60 per month = £2020 per year.
As dave states above that is a lot more than average, so as well as looking at your consumption check that the opening reading you took when you moved in is correct.

dogshome

With your £60 D/Debit payments for a year, now plus the demand for an extra £1,300, your Annual fuel cost totals £2,020 which requires a monthly D/D of £169 just to keep the account in balance.

If you can afford it, go back to BG and offer to pay the debt off at £xxx a month, as well as raising your D/D's to £169

As Westondave has posted, it's vital you do the homework to discover where all this Power & Gas is going - You may well be living in a large property that's not well insulated with a big family, which would expalin it.
But if not post the Kwh figures from each bill you have had on this site

C_Mababejive

I think if i had received a notice saying i was £600 in the wrong direction, i would have explored it a little further there and then. I do think PPMs are the way forward for people who struggle to manage their utilities.

undaunted

Are these policies designed with the view that if you're in debt it may prevent you switching?

It surely isn't sensible or desirable for any other reason to let such debts accrue?

deshepherd

undaunted wrote: »

Are these policies designed with the view that if you're in debt it may prevent you switching?

I think that a feeling that this might be the case was behind Ofgem ruling that suppliers had to attempt to keep accounts "balanced" which has led to the "spring reviews" that every one complains about. I suspect that the DD increase here is so large precisely for this reason to attempt to bring the account back into balance at the start of next summer

TIMMY85

A few points I hope will help...

1) British Gas will review a direct debit every 6 months AFTER the customer has been a customer for 12 months. This allows BG to have a full years consumption. Within the first 12 months the DD can be reviewed at the customers request OR if the customer calls and the agent thinks that it should be.

2) My general rule of thumb would be that an account should never really get more than 2.5 months payments in debit or credit in order to balance out. If I was paying £60 per month and had a summer statement showing I owed £600...this would take 10 months of ZERO usage to repay the debit...this would be unlikely to balance.

3) If a customer receives a statement showing a debit or credit which is large they should call the supplier with a current reading to check it is accurate.

4) If a DD has been in place the entire time then it should not pose a problem in changing supplier as BG has never asked for full payment of the balance. If however a DD was cancelled and a bill sent for, for example £200 and then a DD was set up they could ask for the balance asked (£200) to be paid before allowing the switch.