British Gas misleading quote on Energy Club

fraggle42

Hi all,

First post here.

I signed up for the Energy Club here and got a quote to switch suppliers through their deal.

Previous supplier was SSE who bring their bills down by usually sending me annual refund cheques of about £200 ~ £300 a year (not for overpayments, they're loyalty payments).

Anyway, in the deal comparator I put my details in, actual gas and electricity usage over the past year, actual meter readings.

British Gas came out top, £66 per month for both. (SSE was £120 or so, with about 25% ~ 30% overpayment).

Switched to BG in April.

3 months later, BG have sent me their first bill.

In which they say the monthly payments will be increased to £88pm, due to the original estimate being inaccurate.

If I supplied actual meter readings for the past 12 months, how on earth an any *honest* company say that their estimate based on said readings, was inaccurate?

British Gas would appear to be deliberately supplying quotes 33% lower than their actual value just to get people to sign up, and then hit them with the actual value.

Frankly, sod them. I'm switching back to SSE.


Is there any way I can avoid the £30 (per service) exit fee that BG are likely to want to charge me?

And in future energy deal comparators will MSE consider informing users to take BGs quotations with a LARGE pinch of salt?



Cheers,
Richard

System

Hi - welcome to the forum. Firstly, suppliers are not permitted to pay customers 'loyalty payments' so I am not sure what you are referring to? Suppliers do not have access to all the readings that you gave to your previous supplier. It follows that the new supplier doesn't know whether you have just moved in or been in the house for 20 years. Suppliers will therefore review your estimated usage based on the meter readings that it has received from you.

Any quotes based on £s are meaningless. Did you provide BG with estimated annual usage in kWhs/year for your supply?

Suppliers have a Licence obligation to ensure that your account does not go into debt. That said, I agree that some suppliers use some odd methods of calculating annual usage. Remember, a DD payment is nothing more than a payment made on account. You will only pay for the energy that you use on the tariff that you signed up to. It is unlikely that BG will waive the exit fee.

I use two suppliers for my gas and electricity and I base my comparisons on 10000kWhs/year for gas and 3000 kWhs/year for electricity. MSE shows ZOG and GBEnergy as my cheapest suppliers: £50 a year less than the cheapest dual fuel deal. It might be worth you switching to separate suppliers as the savings may be greater than the £30 BG exit fee.

Biggles

BG don't 'quote' a monthly figure, they quote a fixed tariff and the Cheap Energy Club calculator uses the tariffs to work out a monthly rate.

The key is whether their actual tariff is lower than SSE's tariff for you. If so, and at the end of the year your usage is (roughly) what you had estimated, you'll have paid less with BG than with SSE (after refunds to correct for any overpayments). End of story.

Cardew

fraggle42 wrote: »

British Gas would appear to be deliberately supplying quotes 33% lower than their actual value just to get people to sign up, and then hit them with the actual value.

Welcome to the forum.

Have you reached the conclusion above purely on your experience?

As stated above to get accurate quotes you must enter your annual kWh consumption; entering what you pay in ££s in a comparison website is useless. Phoning with ££ figures is even worse!

footyguy

fraggle42 wrote: »

Hi all,

First post here.

I signed up for the Energy Club here and got a quote to switch suppliers through their deal.

Previous supplier was SSE who bring their bills down by usually sending me annual refund cheques of about £200 ~ £300 a year (not for overpayments, they're loyalty payments).

Anyway, in the deal comparator I put my details in, actual gas and electricity usage over the past year, actual meter readings.

British Gas came out top, £66 per month for both. (SSE was £120 or so, with about 25% ~ 30% overpayment).

Switched to BG in April.

3 months later, BG have sent me their first bill.

In which they say the monthly payments will be increased to £88pm, due to the original estimate being inaccurate.

If I supplied actual meter readings for the past 12 months, how on earth an any *honest* company say that their estimate based on said readings, was inaccurate?

British Gas would appear to be deliberately supplying quotes 33% lower than their actual value just to get people to sign up, and then hit them with the actual value.

Frankly, sod them. I'm switching back to SSE.


Is there any way I can avoid the £30 (per service) exit fee that BG are likely to want to charge me?

And in future energy deal comparators will MSE consider informing users to take BGs quotations with a LARGE pinch of salt?



Cheers,
Richard

Hi Richard, and welcome to MSE :hello:

You say you are a member of the MSE cheap energy club. You also say you have input your anticipated annual consumption based on last years consumption figures.

The CEC will provide you with the anticipated annual cost based on this data. As British Gas was the cheapest offering for you, I can tell you they set their monthly DD charge based on 1/12th of this anticipated annual cost. (often rounded up to the nearest £1)

All energy suppliers have agreed usage profiles. i.e. to allow for seasonal variations.

So if BG have thought it fit to increase your monthly payment by 33% in just 3 months, they must be concerned you are appearing to use substantially more energy than you declare you used last year.

But if you don't agree with BG, this useful MSE article will explain how to challenge such rises.
http://www.moneysavingexpert.com/utilities/lower-energy-direct-debits

Be careful not to cut off your nose to spite your face.
As I understrand it, based on your anticipated annual consumption at the time, BG were going to charge you £66 x 12 = £792 per year.
Whereas with SSE you would incur a cost of £120 x 12 = £1440

Of course, if you are now using more energy than last year, then you should review the position using your latest anticipated annual consumption figures.
In regards the £30.00 early exit fee, I do not see how you can avoid this in the circumstances - you did agree to a fixed term with the ealy exit charge.
However, you can mitigate that cost as the CEC will pay £15 per fuel switch to many suppliers, and other sites recommended here pay up to about £17. Check out the cashback sites too as that could even increase the cashback to £20.

fraggle42

footyguy wrote: »

Hi Richard, and welcome to MSE :hello:

You say you are a member of the MSE cheap energy club. You also say you have input your anticipated annual consumption based on last years consumption figures.

Hi Footyguy,

Correct. I used the previous years bills from SSE (which had the actual meter readings on them, and the rate) as the source of the data I entered into the CEC.

footyguy wrote: »

The CEC will provide you with the anticipated annual cost based on this data. As British Gas was the cheapest offering for you, I can tell you they set their monthly DD charge based on 1/12th of this anticipated annual cost. (often rounded up to the nearest £1)

All energy suppliers have agreed usage profiles. i.e. to allow for seasonal variations.

So if BG have thought it fit to increase your monthly payment by 33% in just 3 months, they must be concerned you are appearing to use substantially more energy than you declare you used last year.

It's this I cannot understand, and which leads me to believe their anticipated annual cost was deliberately underquoted.

* I used actual meter readings in the CEC.
* I used the rate per unit that SSE print on their bills in the CEC.
* There are no new electric appliances in the household.
* The gas boiler has been changed to a much more efficient one.

(the bill said that the gas side of the bill was almost bang on, it was the electricity side where the increase came from)

footyguy wrote: »

Be careful not to cut off your nose to spite your face.
As I understrand it, based on your anticipated annual consumption at the time, BG were going to charge you £66 x 12 = £792 per year.
Whereas with SSE you would incur a cost of £120 x 12 = £1440

Correct.

And after seeing this I just naturally assumed that the SSE tarriff I was on was far, far from ideal (I have been on it since 2001).

To summarise there's no change of circumstances; I used real kWh numbers; so why was the original estimate so far out?


Regarding the CEC, does that work out the suppliers quotations all by itself (using data provided by the suppliers - in which case the supplier cannot "underquote"), or does it send the users data to the suppliers and let them work the quotes out?


To be honest, even if I can get compensation for the 33% increase in monthly payment, if there's no logical explanation for the increase or logical explanation for the low initial quote, I won't give my business to businesses that operate in such a manner.



Cheers,
Richard

System

fraggle42 wrote: »

Hi Footyguy,

Correct. I used the previous years bills from SSE (which had the actual meter readings on them, and the rate) as the source of the data I entered into the CEC.



It's this I cannot understand, and which leads me to believe their anticipated annual cost was deliberately underquoted.

* I used actual meter readings in the CEC.
* I used the rate per unit that SSE print on their bills in the CEC.
* There are no new electric appliances in the household.
* The gas boiler has been changed to a much more efficient one.

(the bill said that the gas side of the bill was almost bang on, it was the electricity side where the increase came from)



Correct.

And after seeing this I just naturally assumed that the SSE tarriff I was on was far, far from ideal (I have been on it since 2001).

To summarise there's no change of circumstances; I used real kWh numbers; so why was the original estimate so far out?


Regarding the CEC, does that work out the suppliers quotations all by itself (using data provided by the suppliers - in which case the supplier cannot "underquote"), or does it send the users data to the suppliers and let them work the quotes out?


To be honest, even if I can get compensation for the 33% increase in monthly payment, if there's no logical explanation for the increase or logical explanation for the low initial quote, I won't give my business to businesses that operate in such a manner.



Cheers,
Richard

What compensation are you seeking - you are not entitled to any as you haven't been disadvantaged? Anything that you have paid out is held on account pending a bill based on actual meter readings. You are not being overcharged. If your DD has gone up, then, if your projected kWh/year usage is accurate, it is likely that your DD payment will decrease as you come to the end of your contract. If that doesn't happen, then you just claim back the credit amount.

The main difference between comparison sites and supplier's sites/bills is that the latter doesn't show VAT on unit prices.

I have switched six times in the past 12 months by running comparisons on MSE CEC and then double-checking with the supplier's website. I have never seen a 1p difference in the annual cost projections. If, as you say, you inputted projected kWhs to get your quote then there can be no question of under-quoting.

The question that you need to ask yourself is 'whether the changed DD is based on an actual or estimated meter reading' and/or 'did I enter an incorrect kWh/year figure?'

dogshome

It seems that you have actual KWh consumption figures for the year preceeding the change to BG, gave these to BG, yet they are asking for a D/D payment well over that first calculated

1) Just check that the KWh useages on BG's first bill are in line with appx. that same period on SSE's billing

2) Useing the known annual Kwh figures and BG's tariff prices, (inc. VAT), calculate for yourself the annual cost and monthly D/D figure - If this gives a D/D figure of £66 WRITE a letter to BG headed Complaint

System

dogshome wrote: »

It seems that you have actual KWh consumption figures for the year preceeding the change to BG, gave these to BG, yet they are asking for a D/D payment well over that first calculated

1) Just check that the KWh useages on BG's first bill are in line with appx. that same period on SSE's billing

2) Useing the known annual Kwh figures and BG's tariff prices, (inc. VAT), calculate for yourself the annual cost and monthly D/D figure - If this gives a D/D figure of £66 WRITE a letter to BG headed Complaint

This may, or may not, get you anywhere. I had a dispute with E.oN a couple of years ago over a proposed DD increase. They based their estimate of my consumption over my first 3 months of usage divided by 3 multiplied by 12. My first 3 months were Winter months. My complaint went to The Ombudsman. The EO's response was that it was up to individual suppliers to estimate usage and set DD amounts and that they had an over-arching Licence obligation not to allow consumers to get into debt. Rather than faff around, I just switched away from them to another supplier.

It is again worth saying. The projected usage that you - the customer - gives to a supplier is only used to set up your initial monthly DD payment. From then on, the supplier will use whatever clever algorithms it has in its computer system to revise your projected usage. At best, this is nothing more than a guess.

[Deleted User]

I had an issue with npower who wanted to increase my gas DD, again this was based on winter usage figures only and after only 3 months. A quick official complaint with historic readings to back it up (going back over 3 years), and the increase went away.
Switching energy providers in the winter has always given rise to these issues for me. Never happens for spring/summer switches. Just be prepared to question it and have the information to back up your claims. And never phone them when upset by their emails/letters. Better to have a calm head on and put it in writing too.

brewerdave

3 years or so, this forum was full of complaints re EDF who used to regularly put up DD payment amounts based on some very strange usage algorithm - I phoned them roughly every three months to get the DD returned to what it was previously - by the end of my time with them they had finally sorted the issue out ( or switched the offending programme off:rotfl:) and I got an apology from their CS DEPT.!

Sounds like BG have borrowed their software!