unasked for refund

depressedlemur

Hi,
This probably sounds daft but please stay with me. I get my fuel from British Gas, last year I was in credit, but they tried to put my payments up. I called them and refused to let them do it as I was in credit. They agreed and kept my payments the same. Yesterday I sent off my meter readings. I found out that I was over £100 in credit. This means, to me, good news as I do not need to change my payments. This morning I got an email from them saying that they had refunded this credit (without me requesting it) so my account is now 0. Because of this, they say I am now at risk of falling short and increased my dd by £20 a month.

Surely this is illegal. They have acted without my permission and created an extra financial burden on me. I look after my finances and would not have entered into buying something new at that price so how can bg be allowed to force this on me?

System

depressedlemur wrote: »

Hi,
This probably sounds daft but please stay with me. I get my fuel from British Gas, last year I was in credit, but they tried to put my payments up. I called them and refused to let them do it as I was in credit. They agreed and kept my payments the same. Yesterday I sent off my meter readings. I found out that I was over £100 in credit. This means, to me, good news as I do not need to change my payments. This morning I got an email from them saying that they had refunded this credit (without me requesting it) so my account is now 0. Because of this, they say I am now at risk of falling short and increased my dd by £20 a month.

Surely this is illegal. They have acted without my permission and created an extra financial burden on me. I look after my finances and would not have entered into buying something new at that price so how can bg be allowed to force this on me?

Welcome to the forum. BG’s credit refund policy is clearly stated on its website:

Quote: Refunding your credit

If you're over £75 in credit after paying for a year, we'll automatically refund your credit back to your bank account as long as we've got an up-to-date meter reading from you.

If you're less than £75 in credit, we recommend you keep it there to give you a head start on your bills next year. But if you'd still like a refund, just get in touch and we'll sort it out. Unquote

The problem that suppliers have is that Ofgem - the Regulator - has banned them from holding on to £Bns of customer credits. This was in response to complaints from consumers.

I am not sure that I understand your reference to buying something new? Direct debit payments are nothing more than credits added to your account from which charges are deducted. You will only pay for the energy that you use at the agreed tariff price.

PennineAcute

Some times companies are damned if they do and damned if they do not.

Don't spend the £100 and this will cover your next five payments' increase.

depressedlemur

Hi Hengus, thanks for the clarification, however, surely if there is a £75 limit, it would be better for refunds to keep your credit up to that limit, rather than up your payments by 25%. At the very least, ask tge customer? As for the new item analogy, it was to state that spending that extra for a year would be a decision I would not take lightly.
This is even more annoying because last year I left specific instructions not to refund me without advance notification

System

depressedlemur wrote: »

Hi Hengus, thanks for the clarification, however, surely if there is a £75 limit, it would be better for refunds to keep your credit up to that limit, rather than up your payments by 25%. At the very least, ask tge customer? As for the new item analogy, it was to state that spending that extra for a year would be a decision I would not take lightly.
This is even more annoying because last year I left specific instructions not to refund me without advance notification

The reason that BG is suggesting that your DD has to increase is because the cost of energy has increased. I agree that greater flexibility is needed if a consumer is happy to maintain a credit balance; however, because this site and others complained about how difficult it was for consumers to get their credit balances back, Ofgem insisted that suppliers bring in a DD review policy. In my experience, other suppliers are not as good as BG when it comes to account reviews.

https://www.ofgem.gov.uk/system/files/docs/2016/12/direct_debit_factsheet.pdf

Smodlet

NPower do this every year but in October, not in Spring when there is little need to be in credit. Their limit is £5, not £75 and they wait until we are on the brink of Winter to refund credit and increase DDs.

I complained to them last year and was told, as Hengus says, "Ofgem make us do it." OK, thought I, I will now complain to Ofgem about this ridiculous practice. Ofgem told me it was a load of spherical objects and that consumers are at liberty to leave any credit balance where it is if they so wish. I called nPower back and told them this... "Ofgem make us do it." Time to stop wasting my own time.

I repaid the credit in full by debit card, job done. Engaging with fools is pointless when it is avoidable.

If you are unhappy with the refund, refund it to BG and tell them to put your DD back to where it was. There will be another assessment in a few months and any shortfall can be addressed then. HTH.

The table in this link may be of interest. It is on the last page.

https://www.ofgem.gov.uk/system/files/docs/2016/12/direct_debit_factsheet.pdf

Lord_Baltimore

It is far better to have your money in your bank account (earning interest) rather than for it to be in the bank account of an energy company, whomever they might be. Having an accumulated 'credit' is not good news; the company isn't saving and investing for you, it is getting paid up front for something it hasn't yet supplied. You wouldn't buy anything else on these terms.

Keep a close eye on your energy consumption and keep your account (just) in debit; it is for you to decide what risk there is in possibly 'falling short' and to adjust your payments as you think fit.

spiro

Even if they hadn't given you the £100 they would still have increased you DD by £11.67.

System

Lord_Baltimore wrote: »

You wouldn't buy anything else on these terms.

.

Think about it: we pay for most things in advance of supply. For example:

Broadband
Car Tax
House/car Insurance
Land/Mobile telephone rental
TV Licence
Sky TV
and the list goes on

That said, this is nothing to do with paying in advance. It is all to do with paying by monthly DD which, depending on the timing of a switch, will result in credit and debit balances.

Yes, some of the new/smaller suppliers do ask for the first DD payment in advance of supply as they have to pay their wholesalers in advance. Moreover, as a new smaller, they cannot attract cheap borrowing so cash flow is important to them. The avoidance of some Bank borrowing leads to 'lower than might be' energy prices for consumers.