Eon back billing

Martin.T

I recently logged onto my Eon account which I do not regularly do and noticed that I had quite a lot of credit, I pay direct debit every month and no one has got in contact with me regarding any problems but it turns out that they have not been able to get a reading to bill me in 17 months because of an error when installing the smart meters. After a week of being passed around I finally got them a reading and they billed me and took it off my credited account. I queried if this would be back billing and if so why were they going back 16 months instead of 12 months but was told as I had enough credit in my account to cover the bill and I would not be out of pocket then that is not the case but I am still unsure if what they have done is right if anyone can help out?

Streaky_Bacon

There is some debate as to whether the supplier can successfully bill for energy used more than 12 months ago, if there is credit on the account. One interpretation is that because they have taken the money from you previously, they have carried out a "charge recovery action", within the 12 month of the energy being consumed, even if they haven't issued a bill.

My only input on this is that I had a back billing case against Scottish Power, and the ombudsman instructed them to drop the bill and refund the credit balance.

On that basis, I would suggest that you should at least raise a complaint to Eon, demanding that they drop the back bill, and take it to the ombudsman if they refuse.

You may or may not get the same outcome as me, depending upon how the individual who reviews the matter interprets the rules.

dogshome

Back Billing rules were brought in to stop what was referred to as Bill Shock, so householders had some protection against bills issued late or not at all.


However, if Direct Debits have been paid into the account over the term of the late bills, there is built up credit on the account that clears the debt,
so in fact there is no Bill Shock and Back Billing won't apply.


Unless that is the built up credit doesn't cover the entire debt, in which case Back Billing does apply to the unpaid part of the debt

Streaky_Bacon

dogshome wrote: »

However, if Direct Debits have been paid into the account over the term of the late bills, there is built up credit on the account that clears the debt, so in fact there is no Bill Shock and Back Billing won't apply.

This is the bit that is debatable.

Whether taking the direct debit counts as a "charge recovery action".

21BA. Backbilling
Part A: application to Domestic Customers

Prohibition21BA.1 Subject to paragraph 21BA.2, where the licensee or any Representative Issues a Bill to a Domestic Customer or otherwise seeks to recover (including via a Prepayment Meter) Charges for the Supply of Electricity from that customer (hereafter a “charge recovery action”), they must only do so in respect of:

(a)units of electricity which could reasonably be considered to have been consumed within the 12 months preceding the date the charge recovery action was taken

The matter for interpretation is whether taking a DD is actually a charge recovery action or whether there is no charge recovery action until an amount is deducted from the credit balance.

In my case the ombudsman either didn't take the above into account, or decided that the DDs were not a charge recovery action.

I would also say that, if you think you have £1000 in credit on your account, and then suddenly receive a bill from 2018 which wipes out your credit, that is arguably as much of a bill shock as if that money were instead sat in your bank account. Either way you suddenly have £1000 less in available funds.

tk47

Martin.T wrote: »

I recently logged onto my Eon account which I do not regularly do and noticed that I had quite a lot of credit, I pay direct debit every month and no one has got in contact with me regarding any problems but it turns out that they have not been able to get a reading to bill me in 17 months because of an error when installing the smart meters. After a week of being passed around I finally got them a reading and they billed me and took it off my credited account. I queried if this would be back billing and if so why were they going back 16 months instead of 12 months but was told as I had enough credit in my account to cover the bill and I would not be out of pocket then that is not the case but I am still unsure if what they have done is right if anyone can help out?

They have done nothing wrong, as explained by dogshome above, if working to the voluntary back billing code.

Indeed Ofgem say on their own website:

What are the backbilling rules and when do they apply?

Put simply, a supplier can’t seek additional payment for unbilled energy used more than 12 months prior to the error being detected and a corrected bill being issued....

https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/who-contact-if-its-difficult-paying-energy-bills/energy-backbilling-guide-your-rights

However, new licence conditions were introduced in 2018, as referred to by Streaky Bacon above
This essentially allowed backbilling more than 12 months only where the customer acted in 'Obstructive or manifestly unreasonable behaviour'.
It was also introduced to "encourage suppliers to take regular and accurate meter readings" and hence produce "timely and accurate bills".

More info here from the regulator:
https://www.ofgem.gov.uk/publications-and-updates/ofgem-bans-suppliers-backbilling-customers-beyond-12-months


If your account is still significantly in credit, despite having now been billed to the correct meter reading, this MSE article may assist you:
https://www.moneysavingexpert.com/utilities/lower-energy-direct-debits/

dogshome

When Back-Billing was first introduced it wasn't a condition of a suppliers licence, it was an agreement that the supplier could, or not sign up for - It's now a rule

Also, it was Black & White - Supplier late bills and Back-Billing applies, no matter that the customer had credit built up in Direct Debits.
It was n'power - no suprise there - who challenged the disregard of existing credits and the rules were changed.

E.ON_Company_Representative:_Helena

Morning Martin.T and welcome to the forums.

I'm sorry for the delay in replying, we've been so busy

Already some good information on the thread and thank you for the links.

It sounds like you have spoken to us and been given the correct advise, we have specialists that work though any accounts that may be eligible for the Billing Code and they have a full questionnaire they have to work through.

They will have worked through this to be able to make the decision.

Thank you

Helena

MWT

I would suggest you follow the advice from Streaky to go with a complaint anyway.


Failing to seek a manual reading for 17 months should be sufficient to trigger the back-billing provisions as the 'error' should have been immediately apparent to E.ON when they could not retrieve readings from the meter.


Just because the supplier says they have given 'correct advice' does not make it so...

Streaky_Bacon

E.ON_Company_Representative:_Helena wrote: »

It sounds like you have spoken to us and been given the correct advise, we have specialists that work though any accounts that may be eligible for the Billing Code and they have a full questionnaire they have to work through.

They will have worked through this to be able to make the decision.

It's always good to have specialists going over these issues with a fine toothed comb, making sure that every detail is looked at, and no nuance is missed.

It may, however, be worth pointing out to them that the "Billing Code" doesn't actually apply in the case, having been superseded by the changes to the Standard Licence Conditions, and related guidance from Ofgem, since May 2018.

Might be time to update the questionnaire.

Martin.T

Thanks for the replies and advice everyone,

This was the response upon querying -

Ofgem's Back-Billing Principle (billing code of conduct) is something we must adhere to it. It states: "If your supplier is at fault, it will not seek additional payment for unbilled energy used more than 12 months prior to the error being detected and a corrected bill being issued.

As we're not asking you for any extra payment for the energy you used over 12 months the billing code of conduct doesn't apply on your account

Streaky_Bacon

Martin.T wrote: »

Ofgem's Back-Billing Principle (billing code of conduct) is something we must adhere to it. It states: "If your supplier is at fault, it will not seek additional payment for unbilled energy used more than 12 months prior to the error being detected and a corrected bill being issued.

That's a direct quote from here:

https://home.engie.co.uk/media/1048/energy-uk-back-billing-18072016.pdf

They are still quoting the "billing code", rather than the standard licence conditions, nearly two years after the latter replaced the former.

My argument to them would be that a charge recovery action, under the SLC, does not occur until money is debited from a credit balance, because until that point the customer can recall those funds at any point. A credit balance is a means to ensure that funds can be taken promptly during a charge recovery action. The DD transfers money from the customer's bank account to the customers energy account, but ownership of the money does not change until it is deducted from the credit balance.

The overriding aim is to ensure that the customer does not suffer bill shock, and that means suddenly having far less funds available than they believed they had (whether those funds were in their bank account, or in their credit balance).

Customer - "I've got enough credit in my energy account to cover my bills for the next 3 months, so I can go ahead and pay for X, and pay off Y"

Supplier (a week later) -"we've messed up your billing so we've taken your credit balance, and here is your bill for this month"

EON won't agree with this so you will have to take it to the ombudsman.

Just remember that I personally had the ombudsman instruct SP to cancel the bill and refund the credit balance, so it is nowhere near as clear cut as EON would like to lead you to believe.