Is this reasonable -- DD cancellation fee?

Hoof_Hearted

I moved to a new energy supplier from 8th May. I had a good credit at time of transfer, which has subsequently been refunded (took about a month).
My beef is that I have also been charged a "DD cancellation fee" of £10. I do not think this is reasonable as my DD was due after I transferred to the new supplier, on the 8th, in fact. I do not know why the old supplier would have requested it anyway. What do all you experts think? I have requested the money back but I have yet to hear. I won't name the company at this point as they have been excellent in all other respects.

Neil_Jones

What do your T&Cs say?  You have read them I presume?

Hoof_Hearted

Of course not!

Hoof_Hearted

Read Terms and Conditions now. No mention of cancellation fee for DD.

MWT

Just to be clear, your switch completed on the 8th and the DD was due on the 8th?

That suggests that you cancelled the DD before the 8th?

If so then you may well be subject to the terms of the contract in respect of the cancelled DD.

Cancelling after you have switched should be fine, but in your case it doesn't look like you waited at all.

Gerry1

It's probably a relatively innocent mistake rather than a deliberate scam: the billing system will no doubt be programmed to raise a £10 fee automatically if it's notified by your bank that you have cancelled your DD.  Normally that wouldn't be unreasonable because low prices rely on everything running like clockwork with the minimum of intervention required, and in an ongoing contract a cancelled DD just messes things up.

They have six weeks to prepare the final bill so presumably the system would have collected the unnecessary DD and then refunded it after it had made the final calculations, the DD only being cancelled at that point.  The system probably works in that simplistic way and hasn't been programmed to expect any 'irregularities' such as a customer cancelling their DDs if they know their account has sufficient credit to pay the final bill.  It may make things easier just to have one big 'wrap up' event rather than several little ones (stop the DD, stop the DD fee being triggered, wait weeks for the readings to be verified by the mysterious third party, prepare final bill, reinstate DD if insufficient credit left to pay it, etc).  Of course, this 'simple' system also improves their cashflow by giving them the use of a month's worth of your DD money for up to eight weeks, so that doesn't give them an incentive to rewrite the software !

Whatever the reason, IMHO the fee cannot be justified and if they were to rely on their Ts & Cs to deny a refund this would represent an unfair contract, so you should definitely challenge them.  Disclaimer: IANAL and all that !

Hoof_Hearted

Thanks for a very good response, Gerry. I am a serial switcher and I always cancel my DD if I know my credit will cover the final bill. I keep meticulous records (sad isn't it?). Never had a penalty before. To clarify, old contract finished on 7th May and new one started on 8th May. After the 8th April DD, I knew my final bill was safely covered by my credit balance, so I cancelled the 8th May DD. I have been with less scrupulous suppliers, some listed on here, who will continue to take direct debits after leaving them. I thought that, being a respectable company, they wouldn't request the 8th May DD anyway. In answer to MWT, I did cancel the DD well before 8th May.

brewerdave

Hoof_Hearted said:

Thanks for a very good response, Gerry. I am a serial switcher and I always cancel my DD if I know my credit will cover the final bill. I keep meticulous records (sad isn't it?). Never had a penalty before. To clarify, old contract finished on 7th May and new one started on 8th May. After the 8th April DD, I knew my final bill was safely covered by my credit balance, so I cancelled the 8th May DD. I have been with less scrupulous suppliers, some listed on here, who will continue to take direct debits after leaving them. I thought that, being a respectable company, they wouldn't request the 8th May DD anyway. In answer to MWT, I did cancel the DD well before 8th May.

As per your post ,I cancel the DD if I'm sure that I have enough credit (or even if the amount I'll owe is considerably less than the value of the DD)- but I don't cancel until after the switch has completed so that I'm no longer a customer.

MWT

brewerdave said:

Hoof_Hearted said:

... In answer to MWT, I did cancel the DD well before 8th May.

As per your post ,I cancel the DD if I'm sure that I have enough credit (or even if the amount I'll owe is considerably less than the value of the DD)- but I don't cancel until after the switch has completed so that I'm no longer a customer.

Exactly, cancelling after the switch is both reasonable and generally the right thing to do when the credit is sufficient to cover the final bill, the problem here was cancelling well before the switch had been completed...

For the OP there is no harm in contacting the company and pointing out that there was already sufficient credit and see if they will relent on the penalty.

Also do check the T&C of your contract, if the penalty isn't there then you would have grounds for a complaint.

matelodave

I suppose the crux being was your DD still in force on 8th May as that's when you ceased to be their customer and were still bound by the terms & conditions of your contract with them. You could ask them nicely for the £10 back but they could just tell you to take a hike. Dunno what you do then  

Smodlet

I have never heard of a penalty for cancelling a DD.  I have heard of being forced on to a more expensive tariff for failing to pay by DD.  This lot sound like a bunch of jokers; I wish you would name them so I can avoid them, OP.