Bulb Energy - Can they request a payment increase in this way?

beardiedog

Hengus wrote: »

Suppliers pay their wholesalers in advance of supply to retail customers. Provided suppliers make it clear about payments etc in their Welcome Pack and in the contract terms and conditions, I personally do not see a problem. Unfortunately, not that many people can be bothered to read the small print until there is an issue. Suppliers having to borrow to maintain cash flow will just lead to higher prices. All that said, suppliers should be made to provide consumers with the detailed calculation which underpins all DD changes. I suspect that many of the wild increases are down to the fact that some consumers cannot be bothered to read their meters. Suppliers now only have to obtain a meter reading once a year. Note: use of the word obtain not read.

PS. I suspect that the ‘regulated third party’ is what are known as the Data Collectors. They hold validated consumption data for all properties. On a transfer of a supply, this data going back 2 years is passed to the gaining supplier.

Agree with you about the calculation.

I've always supplied monthly readings and understand that customers need to maintain a credit balance, however some of the stories I've read on this board about upping DDs when customers already have a large credit balance don't make any sense at all. I do think they should give interest on credit balances.

How did the industry survive in the past when customers paid on receipt of a quarterly bill?

dcweather

Same here despite me having three years of accurate monthly readings. I told them I would pay their 11.2% increase and no more. My son has had them try and increase his monthly payment by 75% !! I've told him to reject it. They seem to be trying it on to get money upfront for the winter months to get the interest. I have never had another supplier do this to me. If they don't agree I suggest you give them a low customer service score and switch out as they have no exit fees I believe.

System

beardiedog wrote: »

Agree with you about the calculation.

I've always supplied monthly readings and understand that customers need to maintain a credit balance, however some of the stories I've read on this board about upping DDs when customers already have a large credit balance don't make any sense at all. I do think they should give interest on credit balances.

How did the industry survive in the past when customers paid on receipt of a quarterly bill?

They survived because, like all other businesses, the cost of Bank borrowing was included in price offered to customers. These days, thanks to ML and others, people want the cheapest prices possible but then struggle to understand why a small business should be any different from British Gas. If you were a Bank, would you treat a business loan to a small supplier with a loss showing on its balance as a good risk? Bad risk equals higher borrowing interest rates which, in turn, leads to higher prices which people do not want to pay.

dcweather

I think you are missing the point. I realise they can do this but none of my previous suppliers have forced me into credit during the winter and then left me with a surplus in summer either for me to claim back or them offer to lower my payments. That is the whole point of paying by direct debit to budget for the whole year. I can virtually guarantee my payments will cover the year as I have monthly energy readings for the last 5 years and can see what sort of variation there is and it is no way as much as they are suggesting even in the cold winter of 2010!
It is also an odd notion that it will help prevent financial hardship by paying a lot more now and less later! It is simply a way to try and get payment in advance.

webbit

me too, just change it back

Anthorn

Sle290970 wrote: »

Hi Lexy, and all,

I've had exactly the same email, I'm requesting info on who the "Regulated 3rd party" is, I've only been with Bulb for 1 month, very poor practice by them, my monthly bill has gone up from £149 - £186. I'm sure it's all legal but very bad practice. I hope MSE can keep an eye on this and at least warn others going forward.

Energy suppliers increasing direct debits is covered in MSE's current money tips email. Apparently some energy firms are increasing direct debits by up to 40% over winter and the implication is that they are using resulting credit balances to bolster their finances and raising direct debits might be an indication of financial difficulty.

Plus we're seeing firms playing tricks such as hiking direct debits by 40%+ over winter

https://www.moneysavingexpert.com/latesttip/

joe134

The whole idea of going with the smaller/cheaper boys is to reduce ones outgoings via dd’s !
Not much point if ( even if kwh’s are cheaper )they are just going to increase the dd ‘s, so they can sit on it increasing their pot and reducing yours,
so it is nearly the same as the big six’s dd’s !
The big six may do the same soon ?

System

joe134 wrote: »

The whole idea of going with the smaller/cheaper boys is to reduce ones outgoings via dd’s !

But a higher DD does not result in a higher price. A number of the smaller suppliers have always had higher DD payments in the Winter, and lower DD payments in the summer. If Ofgem was to legislate that all energy suppliers must balance DD payments across the year with nothing paid in advance of supply, then this would result in higher energy costs across the sector. Suppliers have to pay for the energy that they sell on in advance of supply. As one supplier posted recently 'there are no credit cards when it comes to paying wholesalers for energy'.

As far as 'increasing the pot' is concerned, Bulb Energy's last accounts showed an operating loss of £1.984M.

Edit:

To get back to the original question, ML in the latest newsletter states:

- Is it allowed to do this? Unfortunately, yes. Ofgem rules just state any change has to be clearly explained with 10 days' notice.

joe134

Hengus wrote: »

But a higher DD does not result in a higher price. A number of the smaller suppliers have always had higher DD payments in the Winter, and lower DD payments in the summer. If Ofgem was to legislate that all energy suppliers must balance DD payments across the year with nothing paid in advance of supply, then this would result in higher energy costs across the sector. Suppliers have to pay for the energy that they sell on in advance of supply. As one supplier posted recently 'there are no credit cards when it comes to paying wholesalers for energy'.

As far as 'increasing the pot' is concerned, Bulb Energy's last accounts showed an operating loss of £1.984M.

Edit:

To get back to the original question, ML in the latest newsletter states:

- Is it allowed to do this? Unfortunately, yes. Ofgem rules just state any change has to be clearly explained with 10 days' notice.

I didn’t say higher price, higher outgoings per month!
Some people go for smaller companies for smaller , steady dd’s, related to the cheaper price ,they live month to month, especially winter.
If the company cannot rely on steady monthly dd’s ,they should stipulate it in clear terms, not hidden away, and as long as the customer knows and agrees , ok.
Some do.
They state upfront Dd,s,.
The customer is buying their energy in advance like the company

So why not state if they fluctuate as well, winter/summer.
Ain’t rocket science if they have a sound business plan.
They should not be allowed to run on a shoestring.
As I have said before, they should ALL be stress tested now.
7 bust this year, more to follow, and dd’s like oftm, is no way to run a market.

Anthorn

Hengus wrote: »

But a higher DD does not result in a higher price. A number of the smaller suppliers have always had higher DD payments in the Winter, and lower DD payments in the summer. If Ofgem was to legislate that all energy suppliers must balance DD payments across the year with nothing paid in advance of supply, then this would result in higher energy costs across the sector. Suppliers have to pay for the energy that they sell on in advance of supply. As one supplier posted recently 'there are no credit cards when it comes to paying wholesalers for energy'.

As far as 'increasing the pot' is concerned, Bulb Energy's last accounts showed an operating loss of £1.984M.

Edit:

To get back to the original question, ML in the latest newsletter states:

- Is it allowed to do this? Unfortunately, yes. Ofgem rules just state any change has to be clearly explained with 10 days' notice.

Agreed, a higher direct debit doesn't increase the price but it quite obviously does increase the money we pay. What it all hinges on is whether the direct debit comes down after the winter period to take account of the credit we build up during winter. In my case, no it hasn't.

Over the past 12 months with Scottish Power, my own calculation of £38 per month agrees with the calculation of MSE CEC and uSwitch which are the same based on usage over 12 months. Yet I have paid £57.64 every month for 12 months and my account is now in credit by £270.03. Scottish Power are still sitting on that credit but have agreed to reduce my direct debit to £12 per month too late because I'm already switching at a saving of just £22 p.a. principally to get that credit back. The biggest question is what will my direct debit be after the credit is used up.

The last estimation I've seen is that energy companies are sitting on £1.3bn owed to customers because of accounts being in credit and they sit on that because they don't give the credit back!

It's probably time for Ofgem to start supporting customers instead of supporting energy companies' extracting money from customers which should actually be illegal.
https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/understand-your-gas-and-electricity-bills/energy-bill-credit-explained