Thoughts on this new refund scheme?

undercover_peon

Thought I'd ask for people's views on this.

If you haven't seen it the details are here

http://www.dailymail.co.uk/news/article-2560880/Five-Big-Six-energy-firms-hand-money-homes-credit-gas-electricity.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

Personally I think it is pretty pointless and even counter-productive.

Who cares about getting a small refund? I'd much rather payments were set accurately every twelve months for example. I HATE Npower but imo I think (if their billing system worked) their automatic refund process is about right.

Note I said automatic refund process NOT direct debit reassessment process.

In my view payments fluctuating wildly is more of an issue that refunding credit, as credit is not unexpected as usage varies.

All views welcome.

Cardew

Agree completely.


The whole purpose of the DD scheme is to even out payments over a 12 month period. As such everyone should be well in credit(by a couple of month's payments) at the end of summer.


If this stupid idea of refunding, if you are more than £5 in credit, comes to fruition it will mean that DD payments will fluctuate wildly all through the year.


If someone is refunded a credit balance of, say, £100 it will mean they can earn a few pence in interest.


I wouldn't mind betting this proposal will see the end(or reduction) of DD discount.

Bark01

The refund check is only carried out once a year at the annual review, so it not like customers won't be able to build up credit over the year.

Both suppliers to announce changes have also stated the DD amount will only be automatically reviewed twice a year.

undercover_peon

Depends entirely when the annual review occurs though. Sending a credit back to someone going into Winter irks a lot of people. Equally some people simply will not accept the reality that their payments need to increase.

I prefer to voluntarily overpay, but I accept the companies need to have some kind of automated system.

It is worth noting that the twice yearly review is the system Npower uses, although there is still an issue with how this is done. I don't think six months is long enough to smooth out any credit or debit.

I would propose a six monthly review, with any debit or credit taken over a 12 month period. This means if there is a cold winter it won't skew the payments as much.

Also if there is going to be an automatic refund £5 is a stupid amount. I would think something in the order of £50 or £100 would be more sensible.

Sadly, for me, this is an issue where those who are clueless like to complain and/or be seen to be doing something.

dogshome

From what I've read in the press, (Telegraph), the proposal was that Credit values existing on the 12th month anniversary of the account, would be returned

Which means that a customer who joins in November will have incurred a big debt in Winter, then paid it off over the Summer with a possible Credit the next November - Are the Big 5 going to happily hand money back at that time knowing full well there will be an increasing debt over the next 6 months ?
And what happens to the policy of Zero spring balances

Hey look ! There's a whole flock of flying pigs overhead

I_have_spoken

Chances are it'll be a shambles, then the Govt. and the Big 6 can turn around and say 'let us install Smart Meters to snoop on you and it'll all be sorted'.

Which is what they both wanted to begin with.

Wake up people.

undercover_peon

I agree that it is a waste of time though for different reasons

The crucial thing is it looks like the government and energy suppliers are doing something... That is their sole intention here it seems.

tripled

If I was an energy supplier, I'd be inclined to set account anniversaries to be the second quarter of the year (when customers are least likely to be in credit) and, if the changes make direct debit customers less profitable, reduce the direct debit discount. Even if energy suppliers don't do the former, the latter is likely and I don't see how that benefits consumers.

TheOneINT

Stupid scheme imo

d12345

I would prefer to pay for my gas and electricity as I use it but of course I don't because it is cheaper to pay by DD.


I would even like to pay quarterly in arrears using my cashback credit card but it is still cheaper paying by DD.


Or do what I did 40 odd years ago and save up £1 a week in a tin to pay the quarterly bill in the Hydro shop the day before disconnection date on the second or was it the 3rd? red letter.

tim9966

I prefer to pay for what I use, and I can do that with British Gas as I've got it set up as a variable monthly direct debit, so I get the discount, but only pay for the exact amount I used.