Ovo Energy Back-Billing over 12 months of Energy Usage

dondhain

Hoping someone can help me please... I have been going back and forth with Ovo Energy and they are adamant that they have done the right thing.

I was with Ovo Energy from 26 Sep 2017 up until 13 September 2019 paying £129 a month by Direct Debit. 

After being with Ovo Energy for some time, the website notified me that my direct debit was too high and that I could reduce it. However I kept it the same as Ovo Energy had an incentive where they pay you interest on any available credit. So my credit kept building up and when I left Ovo in September 2019, I requested a refund of over £1,000.

On 20 January 2020, my current energy provider (EDF Energy) requested meter readings and when I entered these in the system it showed an error saying that the readings were too high. They then contacted Ovo Energy, who quickly realised that they had not billed us correctly for the energy usage whilst they were our energy provider and thereafter provided corrected opening reads to EDF. On 21 January 2020, Ovo Energy produced a new bill for the 24 months that they underbilled us totaling over £1,000. 

As per Ovo Energy:

“We’ve just noticed that your electricity statements between since you came on supply with us are incorrect – we’re really sorry about that. This has happened because your meter should have been gained as Economy 7 (two registers -one for day usage, the other for night usage) but we gained it as single rate. As a result, you have only been billed for one of the two registers on your meter and undercharged.” [dated 21 January 2020].

I would like to reiterate that I played no part in providing meter readings, these were taken directly from the smart meter. Ovo Energy would have had visibility of both Electricity reads, but they only billed for one of them.

From my understanding of the Ofgem rules of backbilling, an energy provider cannot bill for energy used more than 12 months but Ovo is insisting that they can since my direct debits would have been sufficient to cover the bill. I feel somewhat penalised because had I gone by the system and lowered my DD down to roughly £10 a month, I would not have had the credit available to pay for the new bill and consequently Ovo would not have billed for it. 

Their latest email to me said:
"As you are aware we cannot seek "additional payment" for energy usage that is more than 12 months old. However we are allowed to use any payments that were made, and the subsequent credit, to offset the unbilled usage. In your case we had charged you for £342.07 of usage when we should have charged £1054.80, a difference of £712.73. As your Direct Debit had been set at the correct level to cover your usage, and there was £774.42 of credit available up to the 21st January 2019, this was used to cover this period in line with the Back Billing Code."

What they have done, is collated all my payments and discounts etc and allocated it to the new bills for the "correct charges". By that I mean created an invoice for actual electricity used between Sep 17 to Jan 19 then allocated all the credits that were available as at Jan 19, then any credit left over was used to offset the period Feb 19 to Sep 19. They are requesting over 1k for that period.

They have agreed to give 125 as a gesture of goodwill but in my eyes, I should only have been charged 342.07 rather than 1054.80 for the first year (over 12 months ago).

Should I proceed to ask for a deadlock letter, or is Ovo in every right to charge me for the energy used more than 12 months ago because I had sufficient credit on the account?

Ectophile

Yes.  Start off with a formal complaint (you can't get a deadlock letter until you have made a complaint).

dondhain

I have made a formal complaint... i've been going back and forth since January. They have said either accept £125 or we will issue a deadlock letter so that I can take it to the ombudsman. 
Ovo have said I risk losing the 125 compensation if it goes to the Ombudsman and they have made me worried by saying they have checked with the regulators and they are in every right to do what they have done. 

Cardew

This has been raised several times on MSE. Below is the line apparently taken by Ofgem and the Ombudsman for those in a similar position to yourself.
The purpose of the 12 month back-billing provision was to prevent customers having a 'financial shock' when they found that they faced a large unexpected bill. It is not a 'fine' for the company making a mistake.
You and many others who paid by direct debit will not suffer any 'financial shock' as you have paid the correct amount for your electricity and will not face an outstanding bill. Had you paid on receipt of quarterly bills you would of course been better off.

Don't shoot the messenger -  

MWT

Cardew said:

This has been raised several times on MSE. Below is the line apparently taken by Ofgem and the Ombudsman for those in a similar position to yourself.
The purpose of the 12 month back-billing provision was to prevent customers having a 'financial shock' when they found that they faced a large unexpected bill. It is not a 'fine' for the company making a mistake.
You and many others who paid by direct debit will not suffer any 'financial shock' as you have paid the correct amount for your electricity and will not face an outstanding bill. Had you paid on receipt of quarterly bills you would of course been better off.

I'm not sure it is that cut & dried.

The DD payments are payments on account to be used to settle correct and timely bills when they are received.

The payments on account are refundable at the customers request at any time.

An untimely bill delivered to correct an error that the provider could have easily determined to be an error had they diligently paid attention to the data in their possession, doesn't excuse a failure to repay an accrued credit, nor does it lessen the shock of receiving such a bill covering a period well in excess of the previous 12 months.

dondhain

MWT said:

Cardew said:

This has been raised several times on MSE. Below is the line apparently taken by Ofgem and the Ombudsman for those in a similar position to yourself.
The purpose of the 12 month back-billing provision was to prevent customers having a 'financial shock' when they found that they faced a large unexpected bill. It is not a 'fine' for the company making a mistake.
You and many others who paid by direct debit will not suffer any 'financial shock' as you have paid the correct amount for your electricity and will not face an outstanding bill. Had you paid on receipt of quarterly bills you would of course been better off.

I'm not sure it is that cut & dried.

The DD payments are payments on account to be used to settle correct and timely bills when they are received.

The payments on account are refundable at the customers request at any time.

An untimely bill delivered to correct an error that the provider could have easily determined to be an error had they diligently paid attention to the data in their possession, doesn't excuse a failure to repay an accrued credit, nor does it lessen the shock of receiving such a bill covering a period well in excess of the previous 12 months.

This is exactly my point.
I could have easily reduced my DD amount as the system was saying that there is enough credit on the account and I could have easily asked for a refund of the Credit on the account, but I didn't because Ovo energy give you interest on any credit (at least 3%).
They have clearly stated that they have used the credit to offset the unbilled usage - but isnt that the whole point of Ofgem stating you cannot be billed for more than 12 months of energy usage?

Cardew

dondhain said:

MWT said:

Cardew said:

This has been raised several times on MSE. Below is the line apparently taken by Ofgem and the Ombudsman for those in a similar position to yourself.
The purpose of the 12 month back-billing provision was to prevent customers having a 'financial shock' when they found that they faced a large unexpected bill. It is not a 'fine' for the company making a mistake.
You and many others who paid by direct debit will not suffer any 'financial shock' as you have paid the correct amount for your electricity and will not face an outstanding bill. Had you paid on receipt of quarterly bills you would of course been better off.

I'm not sure it is that cut & dried.

The DD payments are payments on account to be used to settle correct and timely bills when they are received.

The payments on account are refundable at the customers request at any time.

An untimely bill delivered to correct an error that the provider could have easily determined to be an error had they diligently paid attention to the data in their possession, doesn't excuse a failure to repay an accrued credit, nor does it lessen the shock of receiving such a bill covering a period well in excess of the previous 12 months.

This is exactly my point.
I could have easily reduced my DD amount as the system was saying that there is enough credit on the account and I could have easily asked for a refund of the Credit on the account, but I didn't because Ovo energy give you interest on any credit (at least 3%).
They have clearly stated that they have used the credit to offset the unbilled usage - but isnt that the whole point of Ofgem stating you cannot be billed for more than 12 months of energy usage?

I agree you could have reduced DD amount, or asked for a refund - BUT you didn't. I would be delighted if you won your case and established a precedent.

I am merely stating the stance taken on previous similar cases by the Ombudsman. The danger is you are getting bogged down in giving YOUR interpretation of what Ofgem intended in the Back-billing provision. Their interpretation was that it should not cause 'financial shock' by the company's error; and it is a fact that you have simply paid for the energy received.

Playing the devil's advocate these are quotes from Ofgem's guide.

"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."

They haven't sought 'additional payment'

"Your supplier can’t ask to be paid for unbilled energy used more than 12 months ago"

They haven't asked to be paid.

If you have your deadlock letter, give it another go with the Ombudsman.

MWT

Cardew said:

"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."

They haven't sought 'additional payment'

"Your supplier can’t ask to be paid for unbilled energy used more than 12 months ago"

They haven't asked to be paid.

If you have your deadlock letter, give it another go with the Ombudsman.

I still think it is entirely incorrect to say that they have not asked for additional payment, and the extra they ask for was entirely un-billled until well after the 12 months for the most part.

The aim of the regulations was indeed to avoid financial shock and when you believe you have a large credit and the provider decides to issue an unexpected bill so they can help themselves to that credit unexpectedly, shock is indeed what happens...

Let's hope the OP decides to take it all the way.

MWT

... also the fact that they paid interest on the credit balance is a clear indication that they did not regard it as a 'payment' but an amount of the customers money held by them on account...

Cardew

I agree that a system that treats those paying by direct debit less favourably than those paying quarterly lacks sense.  Unfortunately you, or I, are not interpreting the guidance on backbilling.

I have been to the Small Claims Court a couple of times and the clear principle for a claim is to prove a financial loss; and the OP has not suffered a financial loss. IMO that will doom any legal challenge.

MWT

Cardew said:

I have been to the Small Claims Court a couple of times and the clear principle for a claim is to prove a financial loss; and the OP has not suffered a financial loss. IMO that will doom any legal challenge.

He had an entirely refundable credit upon which he was being paid interest before the unexpected back billing and now he doesn't.

That sure seems like a loss to me...