Nuances of late billing compensation

Streaky_Bacon

As I understand it, suppliers are now liable to pay compensation for the following reasons:

- £30 if the final bill is not issued within 6 weeks

- £30 if the credit balance is not refunded within 10 working days of the final bill

- a further £30 if the credit balance, and the original "late credit" compensation is not paid within a further 10 working days (20 working days from the final bill)

However, I am not clear on a couple of nuances, and I wondered anybody had a clearer view.

1) The final credit timer originally didn't start until the final bill was issued. Is that still the case, or does the final credit time now start no later than 6 weeks after the customer switched? Does a final bill after 10 weeks just draw £30 compensation, or £90 for a late bill and two late payments?

2) Does anybody the situation if the final bill is incorrect? If they issue an incorrect final bill after 5 weeks, an then a corrected bill 2 weeks later, are they liable to pay the "late bill" compensation?

Gerry1

Streaky_Bacon said:

1) The final credit timer originally didn't start until the final bill was issued. Is that still the case, or does the final credit time now start no later than 6 weeks after the customer switched?

The original situation was fairly meaningless because there was compo if the credit wasn't refunded soon after the final bill was issued, but there was no deadline for issuing the final bill itself.  Presumably the problem was that the issuing of the final bill was not entirely within the losing supplier's control, e.g. if The Mysterious Third Party is involved.

However, Ofgem subsequently tightened things up a year later, so the clock for the six and eight week deadlines starts ticking from the date of the switch.

Streaky_Bacon

Thanks Gerry. I can't see anything in the link you provided that confirms that the late credit refund clock now starts from the date of switch. I also looked in the statutory instrument, and couldn't see any specific reference.

https://www.ofgem.gov.uk/system/files/docs/2020/02/switching_gsop_phase_2_policy_decision_november_2019.pdf

You are certainly right that previously there was no deadline for the bill and so no deadline for the clock to start ticking on the late refund (until the bill was actually issued).

However, unless Ofgem have issued something which specifically states that the late credit refund clock also starts ticking, I think that maybe it doesn't.

The issue of an incorrect bill, would further muddy the waters. Is an incorrect bill within 5 weeks sufficient to avoid the liability, or do they have to issue an incorrect one.

I suspect that I may be a test case for this soon. My final bill is due soon. I suspect that it will be on time (approx 3 weeks still left), but I also suspect that it will be wrong, because the supplier has previously made an error which has not been corrected as of my last bill.

MWT

I've not seen anything in the rules that would lead to you receiving compensation for a late payment until a final bill has actually been issued, if that was the intention then the deadline would not have been expressed relative to the final bill being issued.

Similarly the rules do not require a 'correct' final bill, so I'd say an incorrect one would meet the standard, but if you are already aware that there is a previous error still on your account I would have been trying to get that fixed rather than waiting for the final bill...

Gerry1

@Streaky_Bacon @MWT Perhaps it's simpler to say that you'll get £30 compensation if you supplier hasn't refunded your credit balance within eight weeks of your switch having completed, and it may increase to £60 if the final bill wasn't sent within six weeks of your switch having completed or the refund was made more than 10 working days after the final bill was issued?

As usual with Ofgem, few edicts are clear and straightforward for the layman to understand !

There may also the added complication that a refund sent by BACS takes three working days, and there aren't many of those between Christmas and New Year, but let's not go there...

MWT

Gerry1 said:

@Streaky_Bacon @MWT Perhaps it's simpler to say that you'll get £30 compensation if you supplier hasn't refunded your credit balance within eight weeks of your switch having completed, and it may increase to £60 if the final bill wasn't sent within six weeks of your switch having completed or the refund was made more than 10 working days after the final bill was issued?

I don't think that reflects their intentions though as they deliberately cascaded the time periods.

For example, you could still get £30 if the final bill was issued in 2 weeks, but the refund was not paid until 4 weeks after that... Only 6 weeks in total but still compensation due.

Similarly if you don't agree with the final bill and ask for it to be changed then I don't think you can expect  to be compensated if that delays your refund...

... but yes, I agree it has been simplified too far in the published statements and too many edge cases remain.

Streaky_Bacon

MWT said:

Similarly the rules do not require a 'correct' final bill, so I'd say an incorrect one would meet the standard, but if you are already aware that there is a previous error still on your account I would have been trying to get that fixed rather than waiting for the final bill...

Thanks MWT.

I'm waiting for the final bill before raising the error to them, simply because I think it will be easier with a final verified reading, rather than their estimate for Oct 31st. Also, it probably isn't worth it until I see that the final bill is actually wrong (perhaps they might pick up the error via some final consolidation).

However, if the final bill is wrong I will push for compensation because, to be fair, the error will be theirs. It is not really up to me to try to rectify their mistake, especially as I don't know if it will be reflected in the bill.

I would put forward the argument to them, and the ombudsman if required, that they are responsible for an accurate final bill, and if the accurate final bill is not issued in time because of an error in their billing, then they should be liable.

Whether that would convince the ombudsman, I don't know.

I suppose it depends if a final bill can really be defined as a final bill, if it ends up needing to be corrected and a new bill issued.

MWT

Waiting to tell them about an error you are already aware of, just so you can claim compensation for the resulting delay feels wrong no matter how you try to spin it, but do let us know how it turns out...

Streaky_Bacon

MWT said:

Waiting to tell them about an error you are already aware of, just so you can claim compensation for the resulting delay feels wrong no matter how you try to spin it, but do let us know how it turns out...

No it's not for the compensation, it is because I don't want to spend the time explaining to them what is wrong, especially if they might fix it in the final bill anyway.

How much time do you think I should spend trying to explain the error to them, and how much should I charge them for my time?

Or should I have to help an energy supplier get their billing right, free of charge?

The obligation is on them, as far as I am concerned, and if I do end up being due compensation, well maybe that will get them to tighten up their billing.