Review of Direct Debit - Timing

gf1

I've recently switched suppliers to Co-operative Energy after a comparison showed that I would 'save money' by doing so. I based my comparison on the usage for the previous 12 months. A few months in to the new contract I have been told that they want to review my DD upwards - on the basis of my use so far. This happened with my last supplier (First Utility) - who did the same thing. Why are these 'so called reviews' carried out at the end of the winter period - when your usage would be higher? Surely this is the point of a monthly DD - there will be months when you're in credit and months when you're in debit - but that over a 12 month period - this will even out?
Can anyone explain why they do this - as it seems like a 'sharp practice' to me? Has this happened to anyone else? Is there a way around this?
On the basis of these 'reviews' they are telling me that my energy usage is increasing year on year - but there has been no significant changes in my household. Any advice appreciated.
Gaynor.

Cardew

The 'review' of monthly DD payments is done by a sophisticated computer algorithm(program) that takes all the factors you mention into account.


The purpose is to ensure that you don't run up a big debit(or credit) balance.


However like any computer system 'Rubbish in = Rubbish out' and when the account has just been opened the computer doesn't have enough data to make an accurate forecast.


All you need to do is contact them and state you wish the DD to stay at the same level and will accept it might/might not cause a debit balance to build up.

bubieyehyeh

Co-op told me when I setup my direct debit, they may from time to time suggest a new amount, but it was my decision whether to let them change it or ask for it to be left the same. However I've not had chance to see if it was a trueful statement by the staff member.

Chunk2

Just had a winter Direct Debit Review from Coop Energy who are trying to raise my DD by over 30%. This is the letter I wrote in response. Cut and paste and edit for your own supplier.

Dear Direct Debit Review Management.
I have just read your review of my account. At the coldest time of the year you have contacted me to state my account is running into debit. Well done ... how astute .... yes it will run into debit at this time when energy use is high. That's why we pay more in the summer ... a fixed amount through the year to balance high and low rates of consumption. My energy use over the year hasn't changed therefore my direct debit amount doesn't need to change. Understand? Your demand to raise my monthly direct debit by over 30% is disgusting.
Throughout the year my energy account has been in credit - which means for at least 9 MONTHS of the year you are earning INTEREST on the EXCESS I have paid the COOP for my energy. That is extra money you have got for NOTHING!
At this time of year when the roles are reversed I expect you to return the gesture and use that money to balance your books through the next two months until you are again earning interest on my account. 9months in your favour against 3 months in mine - maybe the Energy Regulators need to clamp down on this practice and give the customers a fairer deal - maybe we should lobby the Government to renationalise the Energy Business.
This policy of winter reviews is just the sort of low handed business extortion practice that I got from NPower before I moved my account to Cooperative Energy. I expected the Coop to have a more ethical and fair way in which it conducted it's business.

My advice to you is to undo this unholy mess you have gotten yourselves into and go for damage limitation. Restore my account Direct Debit to exactly as it was last year and create customer good will - and I will promise not to move my account elsewhere ......and .....other customers will hear of your good customer practices and flock (in droves of course!) to sign up to receive your energy. Deal?

Meanwhile SACK THE Person WHO IS DAMAGING YOUR BUSINESS!!!
Sincerely

firefox1956

Thanks for the cut & paste offer Chunk2..........
There is no way that I would EVER send a letter like that to anybody at all.
HTH

matelodave

I started my present contract with FU in November 2013 based on my estimate of my consumption and the DD properly reflected that.

However as we are all electric we use at least 70% of our energy between November and March so managed to ramp up a fair debit which became a credit by June. But as they couldn't sort out my account during that time my DD didn't vary which is as it should be.

They now owe us a fair chunk, due to the mild winter both last and this year but I note they haven't offered to reduce my DD to reflect this. I estimate we'll be about £200 in credit when the contract ends in April if the winter doesn't get too cold.

Previous experience with Scottish Power saw our direct debit bouncing up & down like a yo-yo every three months as their "sophisticated computer algorithm" tried to make sense of our consumption and track the direct debit to match - it didn't of course and we ended up nearly £140 in credit which took over 10 weeks to get back when we swapped suppliers.

Cardew

Chunk2 wrote: »

Just had a winter Direct Debit Review from Coop Energy who are trying to raise my DD by over 30%. This is the letter I wrote in response. Cut and paste and edit for your own supplier.


At the coldest time of the year you have contacted me to state my account is running into debit. Well done ... how astute .... yes it will run into debit at this time when energy use is high.

You need to read many of the posts from a couple of years ago; and comments in the media. The Utility companies got hammered for letting accounts go into debit.

Customers complained bitterly that the companies were deliberately allowing accounts to go into debit as a ruse to prevent them switching to another company - the losing company can veto a switch if the customer has a debit balance above a certain level.

The media was full of stories of customers faced with big debts.

Companies have been told by the Regulator that there should be regular reviews of DD level to ensure that the account will be in balance by the Spring review.

In your case a simple letter or phone call stating you wished your DD to remain the same and accepted you would be in debit in the Spring would normally have sufficed - without the necessity to send such an 'over the top' letter.

On the question of interest rates, even if you had been in credit by an average of £100 over the whole year, you would have lost about £1 in interest.


P.S.

Meanwhile SACK THE DUMB !!! WHO IS DAMAGING YOUR BUSINESS!!! (Bet he's an American)

'God Bless America';)

MABLE

I was with Extra Energy and they were going to increase my monthly dd as their system indicated I would use 25 percent more energy in the winter period.

However I could demonstrate to them that the dd was already set at the correct amount and they had up to put date meter readings so they were happy to leave the dd at the present level.


However I have now left them because I prefer to pay variable qtly dd and that was there is no review as I pay on the bill.

Also I can appreciate how Chunk 2 feels but his letter to his energy company will not help his case. My advice is keep to the point and be professional.