Why is prepayment so much more than DD

fabricator

Why is prepayment more expensive than other ways of paying for gas and electric.
I
I had them fitted back in 1992 after getting into bother with money,i pay up front never get into arrears,dont miss a payment,so why do i pay more

dude89

fabricator wrote: »

Why is prepayment more expensive than other ways of paying for gas and electric.
I
I had them fitted back in 1992 after getting into bother with money,i pay up front never get into arrears,dont miss a payment,so why do i pay more

Because the system of prepayment costs more to run. They still need the same background setup of customer service agents, meter readers, periodical changes of meters etc, plus they also cost extra for the keys/cards, cost of processing payments through pay zone etc

Mr_K

Because they've got you over a barrel because of your history so can maximise their profits. The poor pay more for the same amount of energy than the rich -that's the way this crappy country works.

Ask to go on to DD payments/tariff or you'll switch away from them - worth a try. 1992 is a long time ago - if you'd committed a murder you'd have been forgiven by now.......

daveyjp

Because with DD thousands of customers hand over vast amounts of money the supplier can invest and get a return on. A small proportion of this return is given back to those customers.

Nada666

Mr_K wrote: »

Because they've got you over a barrel because of your history so can maximise their profits. The poor pay more for the same amount of energy than the rich -that's the way this crappy country works.

Nonsense. Those on prepayment meters are still being subsidised by those on credit meters. The poor have the freedom to pay exactly the same amount as anyone else - there is no obligation for the poor to use prepayment meters unless they choose to do so.

Those on standard tariffs who pay quarterly - they are the cash cows. That is their choice, though - they must all have more money than sense.

Amara

I actually like my prepayment card. I've figured out DD would cost me approx £5 per month less. For sake of £5 I've got a sense of security, I know how much I spend. It works for me well.

[Deleted User]

I ve watched prepay use increase all the time, most of them are put in by the suppliers because of defaulting on credit meters . They are also the most bypassed meters I find by a factor of 9 to 1, so they are not at all secure and lose millions of revenue. Smart meters promise to end all meter bypassing and can be used in credit or prepay mode a lot cheaper than the present ancient old key/card top up at the corner shop
British Gas for one has stopped even checking prepay meters with maybe a visit every 2 years or so, so they dont get much in the way of meter reading/ safety check costs

fabricator

dude89 wrote: »

Because the system of prepayment costs more to run. They still need the same background setup of customer service agents, meter readers, periodical changes of meters etc, plus they also cost extra for the keys/cards, cost of processing payments through pay zone etc

Has ofgen ever looked into the actual cost.
Since having the meters fitted i have never spoken to a customer agent.
meters would i assume get changed at same life span of others.meters
Meters would get read the same time as normal meter if they get read at all i dont get bills quarterly only once a year showing what i have spent ( so less paper )
when i buy gas or electric BG knows how much i have bought its computerised so no one has to send me reminder or chase me for arrears,i would say its more expensive to have a normal meter,the way i look at it i give my money for gas up front then use it,someone on a normal meter uses gas that BG has lent you then has to wait for their money,banks charge interest on loans so if they are giving gas and waiting for their money is a form of credit and should cost more

lollipopsarah

As a rental I have both prepaid supplied by the same company, I was dreading it when we moved in but soon got the hang of it and tbh found it more convenient to spend say £20 a week than get a wacking great bill every 3 months.
However now we have been lumped with a standing charge of 26p per day each on top so that's going to hurt next week.
You would think that as you paying in advance you would be entitled to a better rate as the supplier has got the cash in their account and earning interest - grrr!
xx

macman

PPM's cost the same as Standard tariff. What you lose is access to the online discount tariffs which are only available on credit meters. Typically a 6% discount.
People think they are more expensive than credit meters, because they're far more aware of what the are actually spending, as they have to be manually topped up. It's like shopping with cash rather than a credit card...
I believe that the UK is the only country in Western Europe that offers the option of PPM's?

fabricator

Sorry for being thick but when is the standing charge taken,