Payment method discrimination?

darkan9el

Hi all, I have a bee in my bonnet, I prefer to pay quarterly, I have control over my money and I like that. I always do a bank transfer and again that suits me fine, its worked perfectly for a long time.

Here comes the bee... I utterly annoys me that Direct Debit (DD) payers get a discount and I do not. I took this bee to the Eon Customer Services (CS) much to their annoyance. I actually had to explain to the lady on the phone that it was not a personal attack on her; to'wit she calmed down. I was told it was cheaper for them if people paid by DD, so I challenged them to prove it, this totally flustered them and I "accidentally" got cut off. Being a tad thick-skinned (think rhino hide) I called back and continued where I'd left off, I was passed to various poor souls who had to endure my plight. I eventually came across a mildly coherent person who was slightly sympathetic.

She listened to my argument of "how can 12 payments by DD be cheaper than 4 payments by bank transfer" I was met with silence, I thought I heard the clatter of calculator keys but don't hold me to that as I have tinnitus and hear all sorts of noises.

The answer I got from Eon was... "I don't know!" So now you know why energy companies are charging so much... they're crap at math.

I would love to hear from anyone who can answer this and do you think that this is a form of discrimination?




As is always the case I

chanz4

They have to employ people to process your payments

peachyprice

Firstly they don't have to wait 3 months to receive payment for energy you've used, with DD they have payment within a month of the energy being used, which mean it sits in their bank account accruing interest, not yours.

And secondly they are at less risk of non-payment. You could easily run up huge bills for 3 months over winter and then not pay, chasing you to get you to pay costs money.

I'm surprised the bods at Eon couldn't work that out themselves

yangptangkipperbang

peachyprice wrote: »

which mean it sits in their bank account accruing interest, not yours.

No it doesn't ! They have to pay their suppliers and staff and rent and rates and insurance and....and....and.....

ollski

They aren't discriminating against you as you have the right to get your bill discounted aswell if you pay by their preferred method.

Scottishmummy

If you were to pay by monthly standing order where you still have control rather than DD where they have control they should give you the same discounts as they are receiving the monthly payment. It is because you are not paying monthly that is the problem. I have read on here of a few people that pay by monthly SO and receive the DD discount.

Bark01

Cash/cheque customers are statistically at much larger risk of bad debt. So carry this cost. Its the same logic that means young drivers carry a higher insurance premium. There is also a guaranteed cash flow from DD that isn't present in CC. This is why some CC tariffs carry a prompt pay discount, however prompt pay has recently been banned by Ofgem.

If you have a general enquiry about pricing its much better to send an email rather than call up. The guys on the phone don't know everything.

There is an argument to be had that Prepayment should also be cheaper than cash cheque for the same reason, but PrePayment due carry different infrastructure costs.

Cardew

Scottishmummy wrote: »

If you were to pay by monthly standing order where you still have control rather than DD where they have control they should give you the same discounts as they are receiving the monthly payment. It is because you are not paying monthly that is the problem. I have read on here of a few people that pay by monthly SO and receive the DD discount.

With a monthly DD they only have as much 'control' as you are willing to give them.

The initial DD payment is agreed and you give them permission to vary that amount as long as you are informed in advance.

If you don't agree with the new level of DD you either get it changed, or cancel the DD.

I haven't checked recently, but in the past you didn't get the same level of discount for paying by Standing Order(as DD) and I would very surprised if that has changed.

Peachyprice has summed it up in post#3 - companies provide a financial incentive for paying by DD because it saves them money.

Former_E.ON_Company_Representative:_Malc

darkan9el wrote: »

Hi all, I have a bee in my bonnet, I prefer to pay quarterly, I have control over my money and I like that. I always do a bank transfer and again that suits me fine, its worked perfectly for a long time.

Here comes the bee... I utterly annoys me that Direct Debit (DD) payers get a discount and I do not. I took this bee to the Eon Customer Services (CS) much to their annoyance. I actually had to explain to the lady on the phone that it was not a personal attack on her; to'wit she calmed down. I was told it was cheaper for them if people paid by DD, so I challenged them to prove it, this totally flustered them and I "accidentally" got cut off. Being a tad thick-skinned (think rhino hide) I called back and continued where I'd left off, I was passed to various poor souls who had to endure my plight. I eventually came across a mildly coherent person who was slightly sympathetic.

She listened to my argument of "how can 12 payments by DD be cheaper than 4 payments by bank transfer" I was met with silence, I thought I heard the clatter of calculator keys but don't hold me to that as I have tinnitus and hear all sorts of noises.

The answer I got from Eon was... "I don't know!" So now you know why energy companies are charging so much... they're crap at math.

I would love to hear from anyone who can answer this and do you think that this is a form of discrimination?

As is always the case I

Hi darkan9el

There are several reasons why we give extra discount to customers paying with a Monthly Direct Debit. Quite a few have been covered by other posters but just thought I'd confirm.

Basically, Monthly Direct Debits make payment collections more efficient, manageable and cost effective for us.

It's cheaper and can reduce our collection costs quite significantly. This helps us to predict our cash flow more accurately and lowers our overall transaction costs.

We're also aware, customers could be earning interest elsewhere on credit balances.

All this is taken into consideration when setting discount levels.

Not sure if this is of interest but we've recently introduced a new online tool called 'Direct Debit Manager.' This gives customers more control over their monthly payments.

It allows customers to change their monthly payments by up to 20 per cent, up or down, provided their account is billed up to the latest meter readings. Up to 5 per cent up or down without readings.

This helps customers adjust their monthly payments to better reflect changing circumstances.

Before completing the change, though, the website will show how much the account will be in credit/debit by the time of the annual review if the change is confirmed but usage doesn't alter accordingly.

Hope this is of interest.

Malc