Direct Debit re-assessment

Mr_Apocalypse

Hi Folks,
I switched from Scottish power to another company (which shall remain nameless for now) in October of last year. I went from paying an average of 65ish per month to 45 with this new company. The SP account had been the quarterly standard, which I basically just paid as I went, whereas the new company was direct debit fixed rates for 1 year.

From October to the beginning of April I was paying £45 per month and I ended up £44 in debit - no big deal, I'll make it up from April to October...or so I thought. Then Just at the weekend, at 00.43 am Easter Sunday, I get an email from them telling me that my direct debit has been re-assessed and I'm now to pay £70 per month. I was shaking when I discovered it as I don't earn enough to give some company £150 of my money just so they can sit on it.

So I examined all of the figures. 2018/2019 winter I used 11% more gas than I did the previous year on Scottish power (the figures on which my application to the new company was based on). When I calculated everything out it would only really be £47 per month say £50 to claw it back. I dare say this has happened to many people on the forum, but i was really surprised at the difference considering I was only £44 in debit after winter.

Then I read the rather feeble explanation of how they arrived at the result (6 months into the contract) :

"How we worked this out:

your current balance DR£44.08 +
how much we think you'll use over the next 12 months - £795.13 =
then we split the total of £840.00 into monthly payments"

Earlier on in the email and also in an email I got from them within the original cooling off period is this phrase:

"We always aim for your account balance to be £0.00 by the end of your contract"

Well it dawns on me that these two things are contradictory, my contract is for 1 year yet here they are calculating my direct debit payments to balance out another 12 months from half way through my contract - 18 months and through another winter.

I may be getting mixed up here as I'm no expert on direct debit, but it seems to me that they are unilaterally changing my direct debit cycle and I would have thought breaching my contract, as we're no longer aiming for the account balance to be 0.00 for the end of the contract (which they told me at the start and I could have reasonably expected), but for a period 6 months beyond and no doubt into price increases. Am I being dim?

I contacted them, very friendly customer service btw, but having none of it - not interested in my calculations or any of the energy consumption charts and bills from Scottish power that I had. When I mentioned that we surely could reasonably expect the £44 debit to be wiped out in the summer, the operator told me that the company likes to run the accounts into credit over the summer - effectively admitting that the aim to get the balance to 0.00 by the end of the contract term is not actually adhered to.

For now I have offered to pay and actually paid the outstanding debit. He couldn't tell me how much it would reduce the direct debit payments to till it went through. It dropped them to £63 per month, even though I have wiped the debt away going into summer. We'll have to take regular readings and phone them up to keep getting re-assessed, but I'm fizzing mad - it'll cost me £50 to end the contract early.

Direct debits get re-assessed - I get that, I also don't expect something for nothing -I always pay what I owe, but they have clearly contradicted what they told me in black and white when I was joining.

Has anyone else had this experience and is this a breach of contract on their part? (of course as this is the energy industry we're talking about here, I'm quite sure someone will come on and tell me that I've breached the contract and should be in Jail, but heyho)

thanks for reading.

Mark

Neil_Jones

First of all you do not and never had had a "fixed direct debit" rate, that implies you can pay £x a month and plough through as much energy as you like. It doesn't work like that.

What you're actually going to be on is a tariff with fixed unit rates for gas and/or electricity, it is this that does not change but you still pay for your usage.

Pretty much all energy customers go into significant credit over the summer months if you're on a monthly direct debit. Remember that the credit will start to get used as you approach Autumn and September, sometimes October depending on the weather.

Mr_Apocalypse

Hi Neil,

thanks for your reply. I realize I dont have a fixed direct debit payment, I meant that I have a fixed price per unit etc. It's going to vary with consumption, my issue is related to the cycle that the direct debits are calculated over.

Mark

PennineAcute

If I were you, I would contact them and ask them to reassess their reassessment and the reasons why you think they are wrong.

Nasty little trick that some companies play, where 6 months into a 12 month contact, and now coming into the warmer period, they reassess you over a 12 month period.

Edit

Just make sure that your monthly statements are on actual and not estimated usage.

Biscuit_Tin

Mr_Apocalypse wrote: »

Hi Folks,
I switched from Scottish power to another company (which shall remain nameless for now) in October of last year. I went from paying an average of 65ish per month to 45 with this new company. The SP account had been the quarterly standard, which I basically just paid as I went, whereas the new company was direct debit fixed rates for 1 year.

From October to the beginning of April I was paying £45 per month and I ended up £44 in debit - no big deal, I'll make it up from April to October...or so I thought. Then Just at the weekend, at 00.43 am Easter Sunday, I get an email from them telling me that my direct debit has been re-assessed and I'm now to pay £70 per month. I was shaking when I discovered it as I don't earn enough to give some company £150 of my money just so they can sit on it.

So I examined all of the figures. 2018/2019 winter I used 11% more gas than I did the previous year on Scottish power (the figures on which my application to the new company was based on). When I calculated everything out it would only really be £47 per month say £50 to claw it back. I dare say this has happened to many people on the forum, but i was really surprised at the difference considering I was only £44 in debit after winter.

Then I read the rather feeble explanation of how they arrived at the result (6 months into the contract) :

"How we worked this out:

your current balance DR£44.08 +
how much we think you'll use over the next 12 months - £795.13 =
then we split the total of £840.00 into monthly payments"

Earlier on in the email and also in an email I got from them within the original cooling off period is this phrase:

"We always aim for your account balance to be £0.00 by the end of your contract"

Well it dawns on me that these two things are contradictory, my contract is for 1 year yet here they are calculating my direct debit payments to balance out another 12 months from half way through my contract - 18 months and through another winter.

I may be getting mixed up here as I'm no expert on direct debit, but it seems to me that they are unilaterally changing my direct debit cycle and I would have thought breaching my contract, as we're no longer aiming for the account balance to be 0.00 for the end of the contract (which they told me at the start and I could have reasonably expected), but for a period 6 months beyond and no doubt into price increases. Am I being dim?

I contacted them, very friendly customer service btw, but having none of it - not interested in my calculations or any of the energy consumption charts and bills from Scottish power that I had. When I mentioned that we surely could reasonably expect the £44 debit to be wiped out in the summer, the operator told me that the company likes to run the accounts into credit over the summer - effectively admitting that the aim to get the balance to 0.00 by the end of the contract term is not actually adhered to.

For now I have offered to pay and actually paid the outstanding debit. He couldn't tell me how much it would reduce the direct debit payments to till it went through. It dropped them to £63 per month, even though I have wiped the debt away going into summer. We'll have to take regular readings and phone them up to keep getting re-assessed, but I'm fizzing mad - it'll cost me £50 to end the contract early.

Direct debits get re-assessed - I get that, I also don't expect something for nothing -I always pay what I owe, but they have clearly contradicted what they told me in black and white when I was joining.

Has anyone else had this experience and is this a breach of contract on their part? (of course as this is the energy industry we're talking about here, I'm quite sure someone will come on and tell me that I've breached the contract and should be in Jail, but heyho)

thanks for reading.

Mark

Offer up an alternative, reasonable method of calculating your DD if you don't like the one the supplier has used.

If they don't agree your solution, the ombudsman is always there to be a referee in matters

Read this first, if you haven't already, to get an idea of what you can do and expect
https://www.moneysavingexpert.com/utilities/lower-energy-direct-debits/

Don't get all "legally" suggesting breaches of contract have occurred (especially when you don't know yourself), as that will only get peoples backs up.

Mr_Apocalypse

Thanks for the responses.

I suppose I'm getting all legally because I'm looking at ways out of it and it's the principal of it, I'm part self employed and would never think of charging a client for future services they haven't agreed to.

I am going to proceed with more meter readings and pressing them to regularly re-assess, but I don't think that I'll be able to get that direct debit back down to where it was at the start until the contract ends and I leave.

they calculate the usage for the next 12 months as £795, but even if I use there own estimate for the contract , which was on the most recent bill - it only comes to £657 (my own estimate is £580 btw), so this assessing it over the next twelve months has had an impact to the tune of £138 on my direct debit bills by their own figures. Probably the price reverting back as well, but I had always intended to review my situation at the end of this deal so it's annoying paying for something I haven't even agreed to in the future.

I'm now going to do very regular meter readings (which was what I did before with scottish power and what I should have done anyway), but yes, I need to get some transparency in their workings and try and offer them all the data that I already have.

many thanks

Mark