Switched but direct debit is higher

mattweeden

I've just switched from EDF to British Gas via the MSE switch. It is much cheaper however I have just ahd an email from British Gas to say my direct debit will be £20 more then what I am paying at the moment. Surely this can't be right?

HappyMJ

mattweeden wrote: »

I've just switched from EDF to British Gas via the MSE switch. It is much cheaper however I have just ahd an email from British Gas to say my direct debit will be £20 more then what I am paying at the moment. Surely this can't be right?

Yes.

It's winter. You use more in winter so the DD is set higher initially.

You also need to build up a credit balance.

You pay at the end of the first month of supply therefore you've used a month of energy on credit when DD payments require you to be in credit when the bill is produced.

I usually log on to the online service and try and reduce the DD to the lowest they will accept.

If you don't wish to pay for energy in advance by DD you can opt to pay in arrears when the bill is produced. It will cost you a little more each year but might be worth it especially if you can use the money to reduce interest payable on credit cards.

mattweeden

I'm over £170 in credit with my current supplier. I still can't understand with the estimated usage they have quoted me why the direct debit is so high.

MSE_Dan_L

mattweeden wrote: »

I'm over £170 in credit with my current supplier. I still can't understand with the estimated usage they have quoted me why the direct debit is so high.

Hi Matt

Could you let me know what the direct debit you were expecting, plus the direct debit shown on your letter is?

We'll look into this for you.

mattweeden

MSE_Dan_L wrote: »

Hi Matt

Could you let me know what the direct debit you were expecting, plus the direct debit shown on your letter is?

We'll look into this for you.

The estimate on switch was £67 and British Gas say they will set it at £100

hop3y

Same thing happened to me last year - I just withdrew £250 worth of credit! (Swings and roundabouts I suppose..)

dave52

mattweeden wrote: »

The estimate on switch was £67 and British Gas say they will set it at £100

Looking at my letter the new £100 DIRECT DEBIT in large bubble was just a demonstration example amount if consumption goes up.


£90
Old payment
amount



→

£100
New payment
amount

In this example, more energy than
expected has been used. So, if the
payments stay at £90, then £120
would be owed at the end of the
payment plan.

To make sure there's no
underpayment, we've changed
the monthly amount to £100.

MSE_Dan_L

Hi Dave52 and Mattweeden

Thanks for flagging this issue. We've raised it with British Gas to understand the problem.

British Gas have told us that this section of the letter is actually just an illustration of how its direct debits work rather than what your direct debit costs will be.

If you look earlier in the email, it does have your correct personal projection for Gas and Electric (as per your CEC results page). Your direct debit should normally be the gas + electric projection divided by 12.

We've asked that British Gas urgently look at this email to understand how it can make it clearer that this is just an example figure and not your actual monthly payment. I understand how this could be confusing.

I hope this helps to provide some reassurance.

Thanks

Dan

mattweeden

Thanks for that.

footyguy

It seems MSE Dan L is on the case with regards to this specific issue involving BG which looks to stem from an admin/programming error on the emails being sent out.

However, for others that may find themselves ina similar situation (but not invloving this specific BG error), then this MSE article is very handy in explaining how to challenge unfair DD's
http://www.moneysavingexpert.com/utilities/lower-energy-direct-debits

Simply put, you should be being charged 1/12th of your anticipated annual cost per month.

It can get a little more complicated, as HappyMJ indicates, with some suppliers (usually the smaller ones) that may charge more per month initially if joining in winter ... but those suppliers that do this should make this approach clear from the outset.
(I'm pretty sure BG simply charge 1/12th no matter when you start with them)

MSE_Dan_L

Hi all

I've updated my earlier comment on this confirming that there isn't a problem with the direct debits themselves - they should be set in line with the personal projection and details you saw on CEC.

The £100 figure is purely illustrative, but we've asked BG to make this clearer than it is right now.

Hope this helps.