Outfox withholding 2.5 months of credit

Streaky_Bacon

There is no real justification for them forcing you to stay 2.5 months in credit.

Some people are comfortable with building up a large credit balance, knowing that it will be reduced over the winter, but there is no reason that a supplier should expect that or enforce it.

If you are billed monthly and they take a new DD monthly, then 1 month of credit should be sufficient to ensure that you do not fall into debt.

Anything else is really just an interest free loan to them.

If they want to raise the DD in response, then that it reasonable, but it is not reasonable to keep hold of money that you do not owe them.

Nick_C

MattMiddlesborough said:

Can’t understand why people bother with this company for the sake of saving £2 per month. Just forego ONE cappuccino on the morning on the way to work.

OTM are 19th of 35 companies rated by the Consumers' Association.  Better than British Gas, SSE, EDF, and NPower.

https://www.which.co.uk/reviews/energy-companies/article/best-and-worst-energy-companies/which-energy-survey-results-ajqM43e6ycY8

It would cost me £40 a year to switch from OTM to Utility Point, who are only marginally better (18/35), and I would be locked into a 12 month fixed tariff with a £72 exit fee.

I've been with OTM since September last year.  So far, I've found them to be better than Scottish Power, British Gas, and Ovo (all of whom I've had to make formal complaints about).  Phone calls and emails have been answered quickly and effectively.  OTM agreed to the monthly amount I initially wanted to pay, agreed to revise the DD down after 8 months to match my estimated annual cost ÷ 12, and agreed to the refund I asked for, leaving me with a credit balance of one month's payment.

The bills are easy to understand.  Their calculations always match mine to the penny.  The website is easy to use for submitting monthly meter readings.  My only dissatisfaction is that my SMETS 1 smart meter has turned dumb.  

Petriix

Streaky_Bacon said:

There is no real justification for them forcing you to stay 2.5 months in credit.

Some people are comfortable with building up a large credit balance, knowing that it will be reduced over the winter, but there is no reason that a supplier should expect that or enforce it.

If you are billed monthly and they take a new DD monthly, then 1 month of credit should be sufficient to ensure that you do not fall into debt.

Anything else is really just an interest free loan to them.

If they want to raise the DD in response, then that it reasonable, but it is not reasonable to keep hold of money that you do not owe them.

One month's direct debit is nowhere near enough to cover one winter month's usage. My DD is £39 but my usage will be around £80 per month for the next 3 months. If I only had one month's credit then I would wind up owing £80 by the end of February.

It's definitely important to be wary and keep an eye on how your predicted usage is measuring up against your direct debit amount. And definitely don't let them unnecessarily hike your DD up. But complaining about being in credit at this time of the year is pretty ignorant.

Streaky_Bacon

Petriix said:

One month's direct debit is nowhere near enough to cover one winter month's usage. My DD is £39 but my usage will be around £80 per month for the next 3 months. If I only had one month's credit then I would wind up owing £80 by the end of February.

It's definitely important to be wary and keep an eye on how your predicted usage is measuring up against your direct debit amount. And definitely don't let them unnecessarily hike your DD up. But complaining about being in credit at this time of the year is pretty ignorant.

One month's DD is not the same as one month's credit. One month's credit is enough to cover you for one month.

You have a choice, don't you? Either keep a larger amount of credit on the account and pay a smaller DD, or get some of that credit back and either raise your DD, or top up as you need to.

If you want to leave more credit on the account, giving your supplier an interest free loan, and potentially having to chase it in the event of a supplier failure, that's entirely up to you.

But I would suggest that leaving it there hardly makes you a genius, anymore than asking for it back makes the OP ignorant.

The supplier is not entitled to the money, the OP is, and maybe the OP is a more active manager of their money than you are.

The OP has asked for it back, the supplier agreed and then reneged. Certainly grounds for a complaint if that is the way the OP wants to go.

I don't know how much you actually read the OP's initial post, because they also point out that they built up credit even over the winter last year, suggesting that their DD is high enough to cover it.

Petriix

You're missing the point: if your direct debit is correctly set to 1/12 of your annual usage then you will have a zero balance after 12 months. If it's too high then it should be reduced, but you should always have a significant credit balance at this time of year and 5/24 of your annual usage is absolutely correct.

If you don't want to ever be in credit then you can either pay a premium to be on a different type of tariff where you pay quarterly on receipt of your bill, or choose one of the few suppliers who offer a variable direct debit.

The overriding point is that this is the wrong time of year to be weird about building up credit. If you keep your own accurate records then you can easily see whether or not things are on track based on your previous usage and adjust your direct debit accordingly.

bristolleedsfan

Petriix said:

You're missing the point: if your direct debit is correctly set to 1/12 of your annual usage then you will have a zero balance after 12 months. If it's too high then it should be reduced, but you should always have a significant credit balance at this time of year and 5/24 of your annual usage is absolutely correct.

If you don't want to ever be in credit then you can either pay a premium to be on a different type of tariff where you pay quarterly on receipt of your bill, or choose one of the few suppliers who offer a variable direct debit.

The overriding point is that this is the wrong time of year to be weird about building up credit. If you keep your own accurate records then you can easily see whether or not things are on track based on your previous usage and adjust your direct debit accordingly.

You ( and others) are free to take the view that you have explained it may well suit some people to have a large credit balance for winter, however Streaky_Bacon is absolutely correct people only need to pay 1 months anticipated usage upfront unless have entered into tariff terms stating for example seasonal payments are compulsory, it is up to indivduals how they choose to manage their energy accounts from all the options S.B gave.

Octopus system automatically offering credit refund this week suggested I keep balance of £13.34 based on usage and time of the year ( E only)  which is 1 months anticipated usage based on meter readings submitted during course of 18 months, My Monthly DD is £1.00 as i tend to get other credits.

Scottish Power - Gas - always let me withdraw anything over and above 1 months direct debit, was other credits that caused balance to go over 1 months DD which Scottish Power happily refunded upon request, when submit a meter reading SP auto adjusted DD based on usage ( or not as case may have been) inline with 1 months anticipated usage based on meter reading submitted without factoring in higher Gas usage during winter months which suited me .....

Streaky_Bacon

Petriix said:

you should always have a significant credit balance at this time of year and 5/24 of your annual usage is absolutely correct.

If you don't want to ever be in credit then you can either pay a premium to be on a different type of tariff where you pay quarterly on receipt of your bill, or choose one of the few suppliers who offer a variable direct debit.

Or just could ask for your credit back as the OP has done, and is perfectly entitled to.

The direct debit discount is for paying by direct debit, not providing the supplier with an interest free loan by building up a large credit balance (unless you want to).

Petriix

It's all very well to manage your account how you see fit, if you're completely on top of your usage and payments. However, the likely consequence for a dual fuel customer requesting a refund of their credit balance at this time of year is that they will wind up with a debt by the spring; this will then lead to another post on here complaining that their DD is being hiked up.

It's a pretty simple concept: your DD is to spread your annual cost over 12 equal installments. It obviously changes when you get other credits added to your account but cheaper suppliers don't tend to pay incentives. If you really want to spend your life arguing with minimum wage call centre staff about how their script is wrong then you could conceivably gain a few pence in interest by keeping your credit balance to a minimum, but it's rarely worth the effort.

Dazzlep

It’s the customers right to request a refund as long as there’s a month still in credit.
in fact Martin Lewis himself often mentions it this time of year.
energy companies do not pay interest on credit.
so why use credit to help pay Xmas when many are £100s of pounds of there money (it’s not OFTM money it’s the customers) 
or are you going to argue with Martin Lewis advice?

MWT

Dazzlep said:

...or are you going to argue with Martin Lewis advice?

Why not? ... it certainly isn't always right, or is taken out of context.

In this case it is fine to suggest you ask for a refund as long as you still have next months likely charges covered, but next month odds are you'll have to start topping up the monthly DD to stay covering the next months charges...

You can't just take the refund and then ignore the problem for a few months without getting into debt.

If you are prepared to micro-manage your payments then the advice is sound, if you are not then getting the refund now will lead to problems later...