Underpaying then being trapped

jwh....

Why do all the energy firms offer low payment plans for 12 months knowing you won't be paying enough for the energy that you would use. They know that when people are in arrears there will be less chance of being able to leave the supplier. I started off paying £50 per month, then after 12 months it went up to £70 per month and that still wasn't enough to pay it all off. I cant afford to pay a lump sum so I have started to pay £90. The big energy companies know people will be stuck with them due to being unable to pay off arrears. Then they can put the prices up whenever they want meaning it will become harder to leave. If no one had arrears then they would be competing, and that would mean cheaper gas and electricity.

keith1950

I think the point is that you should be monitoring your usage regularly and providing them with readings once per month, they would then reassess your dd on a great regular basis.

You cannot simply put all the blame on the supplier.

torbrex

^^^^^
what keith said
I have not been in arrears for my utilities since I started paying by DD some 30 years ago, it is me that sets the level of payment and I check the figures at least twice a year.

~Chameleon~

I agree with the other two posters, it's your responsibility to ensure you're paying the correct amount. I've often experienced the reverse whereby they requested a higher DD payment than was necessary to cover my useage.

Cardew

The call centre operators are on commission and will fix the initial DD as low as it takes to get a customer to switch to their company.

DUTR

jwh.... wrote: »

Why do all the energy firms offer low payment plans for 12 months knowing you won't be paying enough for the energy that you would use. They know that when people are in arrears there will be less chance of being able to leave the supplier. I started off paying £50 per month, then after 12 months it went up to £70 per month and that still wasn't enough to pay it all off. I cant afford to pay a lump sum so I have started to pay £90. The big energy companies know people will be stuck with them due to being unable to pay off arrears. Then they can put the prices up whenever they want meaning it will become harder to leave. If no one had arrears then they would be competing, and that would mean cheaper gas and electricity.

You make it sound like everyone or even most have arrears greater than 3 months worth of billing?
When you are walking in the shopping centre or they come knocking on your door , stating they can reduce your monthly bill, they can, but as you have discovered, with arrears increasing.
Know what you use in Kwh per annum and next time you are approached you can simply ask them "How much will xxKWh gas and yyKwh electric cost me from your provider?"
You can know straight away if you maybe saving or not.

flossie217

Set up an online account and enter your meter readings on the same day each month. I do mine on the 1st as it is easiest for me to remember. That way you keep up to date with exactly what your balance is and can add additional payments if you feel any money owing is likely to be a problem.

Wywth

jwh.... wrote: »

Why do all the energy firms offer low payment plans for 12 months knowing you won't be paying enough for the energy that you would use. They know that when people are in arrears there will be less chance of being able to leave the supplier. I started off paying £50 per month, then after 12 months it went up to £70 per month and that still wasn't enough to pay it all off. I cant afford to pay a lump sum so I have started to pay £90. The big energy companies know people will be stuck with them due to being unable to pay off arrears. Then they can put the prices up whenever they want meaning it will become harder to leave. If no one had arrears then they would be competing, and that would mean cheaper gas and electricity.

A supplier cannot prevent you switching supplier just because your account is in debit.

An amount (typically >£200) needs to have been formally owed, and that amount must have been formally demanded at least 28 days previously.

It is rare for a supplier to formally demand any arrears when the customer has agreed to pay monthly by DD; they usually just revise the monthly payment.

(You will get a final bill after a switch has taken place, and this is normally expected to be paid in full ... but payment plans can often be arranged )

Even if you do find yourself stuck with a certain supplier, you can always ask to transfer to a different tariff.

StuC75

Also when you use price comparison sites, base selection on Kwh used and not on Price paid to know what true consumption is to be..

That way can compare Consumption along side cost to work out where the increase debt has come from. A colder winter will increase consumption in those months..

flossie217

StuC75 wrote: »

Also when you use price comparison sites, base selection on Kwh used and not on Price paid to know what true consumption is to be..

That way can compare Consumption along side cost to work out where the increase debt has come from. A colder winter will increase consumption in those months..

...and then double check on the company's own site that they are not offering a different unit priced tarrif. I have just found SE unit price cheaper by transferring through them rather than a comparison site.
No cash back incentive but I would prefer the lower unit rate.

Starrystarrynight

Have you been sending in meter readings, or has the meter reader called round, OP?
When I worked for a utility company, this situation often arose when bills were continually based on estimates, rather than actual readings.