Variable to fixed direct debit

Hey9901

Hi, any advice please. I agreed to a variable direct debit with British Gas ie I supply my monthly meter readings and they charge me for what energy I use. I like to pay more over the winter, when I have more money and less over the summer, when I have less. I have been sending readings and receiving confirmation emails, stating that my bill will be worked out accordingly. I have questioned why my bill has been exactly the same for a few months in a row and have now been told that I have been moved to a fixed direct debit. Are they allowed to do this without my agreement? I wouldn't have agreed to it if I was consulted first. Thank you.

Robin9

Variable Direct Debit doesn't mean what you think - it means that the supplier can alter the DD after a review - usually 6 months.

This i similar to how Council Tax works - when a new figure is charged at the beginning of a Tax Year.

Hey9901

Ok, thank you for the clarification. Maybe I don't mean variable then. I just want to know whether they can move me to a fixed monthly amount without me agreeing. When I first questioned it, the monthly amount was low, like my summer month payments. Then I was in debt by nearly £700 so they more than doubled my payments to cover the debt over the summer months, when I can't afford it.

stewie_griffin

Robin9 said:

Variable Direct Debit doesn't mean what you think - it means that the supplier can alter the DD after a review - usually 6 months.

This i similar to how Council Tax works - when a new figure is charged at the beginning of a Tax Year.

That's not how E.ON define it:

https://www.eonenergy.com/on-it/pay-by-direct-debit.html

Gerry1

Robin9 said:

Variable Direct Debit doesn't mean what you think - it means that the supplier can alter the DD after a review - usually 6 months.
This i similar to how Council Tax works - when a new figure is charged at the beginning of a Tax Year.

Variable Direct Debit does mean what the OP thinks.  It means that you send in a reading, the energy company sends you a bill based on your metered usage and then collects the exact amount by DD.  The usage will vary from month to month and therefore the DD will vary as well.

Many people prefer Variable Direct Debit because it avoids problems associated with credit or debt building up and it alerts users much earlier to unexpected changes in usage.  If Ofgem were any good they'd mandate that all suppliers should offer this as an option.

What you have described is a review of a Fixed Direct Debit.  Reviews are necessary because usage may have been guesstimated; even if based on the previous year's actual usage, consumption can still vary because of colder or warmer weather or a different usage pattern, e.g. working from home, sprogs leaving or returning etc.

Council Tax is not a good comparison because, unlike energy, most services are All You Can Eat: you're not charged more if you visit the library and the park every day, send umpteen sprogs to state schools or ride around all day using your bus pass, and therefore the amount you pay isn't reviewed during the year.

Robin9

This what Eon say when they define Variable Direct Debit :-

"You pay for exactly the amount energy you’ve used after you get your bill. This means it could go up or down throughout the year – normally higher in the winter and lower in the summer*.

Like a fixed monthly Direct Debit, depending on your tariff you could save money too.

*Every year we’ll carry out an annual review of your energy use and try to make sure your balance is £0. We may need to increase or reduce your Direct Debit to make this happen but we’ll let you know if we do."

Which seems to be a mixture

rp1974

If your £700 in debt at the end of Summer your using substantially more energy than the figures,if any you supplied British Gas with.Thats whats they have used when setting your direct debit amount.They have increased the direct debit to account for that,what else do you think they should be doing?.

Asghar

I'm with British Gas and have always paid for the actual energy I have used quarterly via variable Direct Debit. The same with any of the energy companies I have used.

Some of the offers are only available if you choose monthly DD but then I switch to quartely when the switch has gone through. that's with the larger companies. Don't trust these cheaper small companies who seem to take whatever they want monthly and then go bust.

jbuchanangb

You have a tricky situation. You wanted never to get into arrears with BG, by paying exactly what was billed every month or quarter. Somehow this hasn't happened, and you are in arrears. You said you noticed that "your bill had been exactly the same for several months." No. You noticed that your payment had been the same for several months. It was not your bill that had been the same. The bills had in fact been a lot more than your payments, and had been building up the arrears. You have little choice now but to agree a payment amount with BG which will catch up the arrears over an agreed timescale, as well as covering the cost of energy you are still using. While you are looking at it, make sure you are on the best available tariff from BG, because they won't let you switch supplier while you are in arrears.

Hey9901

Thanks. I am no longer with BG. They have agreed it is an error on their part and I have now made a complaint. I built up the arrears as they took £114 for 6 months over the winter, which I did querry. They just kept taking my meter readings and saying my payments were correct. By the time they had sorted it, i was £660 in arrears so they increased my payments to £217 per month. This was being paid over the summer, when my payments are usually between £95 and £120 per month. 

Nebulous2

I left BG in the summer, on a holiday house. One of the things that annoyed me was that they wanted to micro-manage the payments and kept fiddling with the DD. Generally it was in my favour, reducing the payment, but I knew it wouldn’t be enough across the year, and wanted it left alone. 

They didnt seem to understand that no matter how precise their calculations were, they couldn’t know whether we would be there and using gas and electric or not.