Economy Energy - Direct Debit Hike for customers

rjpearce

It appears that Economy Energy has decided to hyke the direct debit amount for customers due to 'recent spikes in energy usage due to the winter period' not based on any factual information about individual usage.

It looks more of a short-term measure to extract cash from as many customers as possible. Another energy company on the brink of failure? :mad:

I can't get through to them on the phone (in queue for over 30 mins and still counting). They have an automated message talking about the reasons for increasing the direct debit and saying wait times could be excessive.

Has anyone else received the same email today?

Your Electricity Direct Debit is changing
Account number xxxxxx
Hi X,

As part of our service to you, we regularly review your account to make sure you're paying the right amount for the electricity that you're using.

During the winter, temperatures have fallen below previous averages leading to an increase in electricity usage, which in turn has led to higher energy bills.

As a responsible energy provider, we want to help make sure the unexpected drop in temperatures does not place you at risk, with a slight increase to your payments our aim is to help cover the increased bills and prevent your balances falling into debit.

Based on the information we have about your gas usage, your Direct Debit needs to change from £52.00 to £57.20 per month. This means your account will stay in good shape throughout the year, and you won't be in debt when winter is over.

Your new monthly Direct Debit will start from 03/02/2018.

Although your Direct Debit is changing, our low rates are staying the same.
For more information on your Direct Debit guarantee click here.

You can contact us on Facebook or Twitter.

I don't have Gas and I haven't even had my first Electricity bill yet.
According to my smart electricity meter my usage is actually 20% lower than last year.

rjpearce

After 31 minutes waiting, I finally got through to someone.
They are increasing ALL customer direct debits by 10% for Winter, regardless of individual usage.

I asked to opt-out and after some time on-hold they grudgingly agreed.
According to them, my rights under the direct debit allowed me to do this.
My account is also currently already in credit.

If this has happened to you and you have 30mins to burn you can stop the Economy Energy Winter cash grab!

System

rjpearce wrote: »

It appears that Economy Energy has decided to hyke the direct debit amount for customers due to 'recent spikes in energy usage due to the winter period' not based on any factual information about individual usage.

It looks more of a short-term measure to extract cash from as many customers as possible. Another energy company on the brink of failure? :mad:

I can't get through to them on the phone (in queue for over 30 mins and still counting). They have an automated message talking about the reasons for increasing the direct debit and saying wait times could be excessive.

Has anyone else received the same email today?



I don't have Gas and I haven't even had my first Electricity bill yet.
According to my smart electricity meter my usage is actually 20% lower than last year.

It really doesn’t matter what your smart meter is telling you. The key determinant is the kWhs/year that were used to calculate your annual cost (and monthly DD), and your revised usage for the whole contract term.

rjpearce

Hengus wrote: »

It really doesn’t matter what your smart meter is telling you. The key determinant is the kWhs/year that were used to calculate your annual cost (and monthly DD), and your revised usage for the whole contract term.

When I transferred I provided my kWh/year usage because I know exactly how much I use each year.

The 10% increase isn't based on my usage they have just slapped it on for all customers.

Cardew

rjpearce wrote: »

It appears that Economy Energy has decided to hyke the direct debit amount for customers due to 'recent spikes in energy usage due to the winter period' not based on any factual information about individual usage.

It looks more of a short-term measure to extract cash from as many customers as possible. Another energy company on the brink of failure? :mad:

Energy companies have a responsibility to prevent Direct Debit customers running up a debit balance.

It is also a fact that many energy companies 'entice' customers with an unrealistic initial direct debit. This forum is full of complaints from people who have paid their DD and still find they have run up a debit balance.

They also use a computer algorithm fed with weather data(used to be from the Met office) that predicts increase/decrease of average consumption.

When I transferred I provided my kWh/year usage because I know exactly how much I use each year.

You are atypical in that you know your annual kWh consumption; many customers wouldn't recognise a kWh if they saw one in the street!

System

Having looked at Economy Energy’s Ts and Cs, I came across this interesting paragraph:

9.5 Paying by Direct Debit means you agree to the following terms:

a) you agree to have the necessary credit in your account to pay for the supply of energy

It would seem that irrespective of projected annual usage, this particular supplier will manage consumer debt by varying DDs as @Cardew has indicated. Clearly, consumers who switched to EE late in the season are likely to find themselves with an increased DD which should reduce from April/May onwards.

Boohoo

Hengus wrote: »

Having looked at Economy Energy’s Ts and Cs, I came across this interesting paragraph:

9.5 Paying by Direct Debit means you agree to the following terms:

a) you agree to have the necessary credit in your account to pay for the supply of energy

It would seem that irrespective of projected annual usage, this particular supplier will manage consumer debt by varying DDs as @Cardew has indicated. Clearly, consumers who switched to EE late in the season are likely to find themselves with an increased DD which should reduce from April/May onwards.

I got this email 2 days ago also.
I joined in August and you have to pay 2 months upfront and then monyhly DD.
My DD is £35 pm for gas.
My 1st bill was £55 for 3 months and my next bill is due 25/02/2018.
I done a quick calc and to date i should be £130 in credit for the 5 months of gas i have used and if i use the same for the next 4 weeks i will be £100 in credit when the Feb bill needs to be paid.
We are not at home that much during the day and only have heating/water on for 2-3 hours at night and the weekends only have the heating on if needed.
EE are quick to send out emails telling customers that we all need to pay more but very very slow in replying to customers emails about no bills ao what ever they want to know more about.

vacheron

As a responsible energy provider, we want to help make sure the unexpected drop in temperatures does not place you at risk, with a slight increase to your payments our aim is to help cover the increased bills and prevent your balances falling into debit.

Based on the information we have about your gas usage, your Direct Debit needs to change from £52.00 to £57.20 per month. This means your account will stay in good shape throughout the year, and you won't be in debt when winter is over.

IMHO the whole point of the direct debit estimate is you build up credit in the summer and a debit in the winter. In a perfect world this would mean that your average balance over 12 months will be zero and at the end of 12 months you have paid for 12 months of energy.

What Economy Energy are suggesting is that they want each customer to have a small credit balance just after winter (the usual worst time of the year) this should then increase to a large credit balance in autumn, and then return to a small credit balance in 12 months time.

So basically "We want to overcharge you for your first years energy so we can ensure that you will have an (unnecessary) positive balance in your account for the whole remainder of your time with us so that we can do what we please with your extra cash while giving you nothing in return!"

System

vacheron wrote: »

IMHO the whole point of the direct debit estimate is you build up credit in the summer and a debit in the winter. In a perfect world this would mean that your average balance over 12 months will be zero and at the end of 12 months you have paid for 12 months of energy.

What Economy Energy are suggesting is that they want each customer to have a small credit balance just after winter (the usual worst time of the year) this should then increase to a large credit balance in autumn, and then return to a small credit balance in 12 months time.

So basically "We want to overcharge you for your first years energy so we can ensure that you will have an (unnecessary) positive balance in your account for the whole remainder of your time with us so that we can do what we please with your extra cash while giving you nothing in return!"

One of the unintended consequences of Ofgem directing suppliers to manage consumer debt was a move away by some suppliers from the old pay 1/12 of the annual estimated cost each month irrespective of whether the account is in credit or debit. Equally, as all suppliers pay their wholesalers before supply, we have seen more small suppliers wanting money up front. The Big 6 can support the old scheme but new/small suppliers do not have the financial leverage to borrow at competitive rates. Remember, Ofgem protects consumer credits via the consumer levy but it doesn’t pay out to Banks when a supplier goes bust.

I know from personal experience how annoying un-necessary DD increases can be. I continually have to remind myself that I will only pay for the energy that I use at the agreed tariff rate, and that a DD payment is nothing more than a payment made on account from which charges are deducted.

PS. Your first paragraph falls at the first hurdle when a switch takes place late in the year.

footyguy

If anyone feels their supplier is unfalirly changing their monthly Direct Debit, this useful MSE article should assist.

https://www.moneysavingexpert.com/utilities/lower-energy-direct-debits

Daddio1981

I have just been stung by Economy Energy too. My DD was set at £46 perm month and the have just taken £223! I have called Customer Service and they said that they had sent me an email regarding this on 10th May. I explained I hadn!!!8217;t received any communication and they explained that they had my email incorrect. They told me it was due to a large amount of debit that has accrued over the year. I explained that the DD amount was set at the start of the contract by Economy Energy and this monthly amount was calculated by my KWhs information provided, there hasn!!!8217;t been any change in circumstance or behaviour in terms of energy consumption, therefore I do not understand how this amount could have accrued (if their original quote was genuine). They explained that it is up to me to manage my energy consumption, under payments or overpayments on their website. I have asked to make formal complaint and I am awaiting a reply. Can anyone offer any advice??