Is this reasonable -- DD cancellation fee?

Hoof_Hearted

matelodave said:

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  

Strictly speaking, I ceased to be their customer on 7th May, so there was no DD due before I left. If I hadn't cancelled, I would have paid my new DD and my old DD in the month of May. I know I would have got it back as they are a decent company but I didn't want to pay two DD's in a month. If I cancelled after I had transferred, it would have been too late. In answer to Smodlet, the company is a small one -- Zebra Power -- but apart from this, and a small delay in refunding my credit, they have been faultless.

Hoof_Hearted

This is how it was shown on my bill:
Payments and Credits

Payment on 08 Apr 2020 £60.57 Credit

DD Cancelled Charge £10.00

Total Payments and Credits for this period £50.57 Credit

New Account Balance £35.42 Credit

Petriix

Normally it's better to leave the DD in place. Your old supplier shouldn't take a monthly payment after the date of your switch but they should (and usually do) use the DD arrangement to return the credit balance to your bank. This system has worked perfectly for me for the past 4 years where I have been with Npower (inherited from the previous occupier), Tonik (their computer systems were questionable in 2017 too!), Bulb, Green.energy, and Outfox The Market (so far no issues). Not one of those suppliers has taken any payment after my switch date and all have refunded my credit balance without issue.

inspectorperez

My understanding is that the way any direct debit arrangement works is that the supplier applies for payment to the DD facilitator for payment ahead of the due date. This enables the DD payment to be processed and cleared funds available to the supplier actually on the due date. I suspect that your cancellation instruction to your bank has occurred after your supplier has applied for payment which will have been at least 2 working days before the payment was due.

Incidentally, I agree with your logic and I also would not leave a direct debit mandate in place after my supply contract had terminated if I knew that I was in credit. The point is to make sure that the cancellation takes place before the supplier would normally have applied for payment.

If you read the many anecdotes published by customers leaving Tonik Energy for example, they habitually apply for direct debits after customers have left and are no longer on supply. There are some companies who are honorable and others who don't operate with the same moral compass.

A supply company does not need to have a direct debit mandate in place in order to enable it to refund monies to customers.

Hoof_Hearted

You are right, Inspector, as I had a refund to my bank even though the DD was cancelled.
inspectorperez said:

A supply company does not need to have a direct debit mandate in place in order to enable it to refund monies to customers.

brewerdave

Smodlet said:

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.

I was "penalised" by a supplier for refusing to set up a DD after an SOLR transfer - they charged me a higher daily standing charge for not having a DD in place but didn't bother to tell me until the final bill was presented.
. As it was only a couple of quid over 7 weeks, I let it go at the time, but now I would probably raise a complaint!!

Smodlet

brewerdave said:

Smodlet said:

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.

I was "penalised" by a supplier for refusing to set up a DD after an SOLR transfer - they charged me a higher daily standing charge for not having a DD in place but didn't bother to tell me until the final bill was presented.
. As it was only a couple of quid over 7 weeks, I let it go at the time, but now I would probably raise a complaint!!

I have yet to come across a company who don't make it perfectly clear in their t's and c's at the outset that they charge higher rates if you don't pay by DD.  Not really seeing grounds for a complaint...

brewerdave

Smodlet said:

brewerdave said:

Smodlet said:

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.

I was "penalised" by a supplier for refusing to set up a DD after an SOLR transfer - they charged me a higher daily standing charge for not having a DD in place but didn't bother to tell me until the final bill was presented.
. As it was only a couple of quid over 7 weeks, I let it go at the time, but now I would probably raise a complaint!!

I have yet to come across a company who don't make it perfectly clear in their t's and c's at the outset that they charge higher rates if you don't pay by DD.  Not really seeing grounds for a complaint...

My point was that I was switched to them as part of the SOLR process - no question of reading Ts & Cs before joining - their Kwh rates were much higher than the supplier that had collapsed, so I moved onwards asap . Never left the DD live with the former supplier  so they didn't have my bank details. The final bill was calculated with much higher standing charges than had been quoted on the email received at the outset of the switch and nowhere did they state clearly that I was required to set up a DD with them. 

Hoof_Hearted

Well, ZebraPower have lived up to my high opinion of them and they have refunded the £10 DD cancellation fee. The reason it was imposed was apparently: ".....our terms and conditions state that an active direct debit mandate must be in place at all times whilst on supply with us." I can't see this in the terms and conditions and there is definitely no mention of a penalty, but I'm happy with the outcome.