Am I within my rights to ask for my money back

DevilsAdvocate1

Hi,

I'm with Pure Planet and at one point I was paying over £100 more a month than I was actually using.  Last year I asked for an account review and a refund.  They kept £100 but refunded me the rest and lowered my monhtly payment.  Its been 12 monhts and my account balance has built up again and as of today, they owe me £203.  This months direct debit and payment have been applied.  I've asked for a refund and have received a message saying they recommend that I keep a balance of 1 monhts payments.  My paymets are £206 in winter and £135 in summer.  I don't think its reasonable to have a full month in hand.  Am I within my rights to insist on at least some of thie £203 back.  If they were to go bust I assume I'd lose this money, so would rather have it in my account.

Thanks.

MWT

To be honest, staying one month in hand isn't unreasonable, you are already using some of that money as you consume energy over the next month.

If the company fails, Ofgem will appoint a 'Supplier of Last Resort' and they will accept responsibility for your outstanding balance so the risk is not high.

That said you can still ask for it to be repaid, or perhaps suggest reducing the monthly payment to work it down a bit, but in general, many of the smaller suppliers will ask you to keep one month in advance on the account so your energy usage is always covered.

[Deleted User]

Most of the smaller suppliers take the first DD payment prior to the start of supply because they have to pay their wholesalers in advance of supply. Personally, I don’t think that Pure Planet is being unreasonable as you agreed to a contract with seasonal DD variations. All consumer credits with energy suppliers are now fully protected by Ofgem in the event of a supplier failure. The new supplier (SoLR)  just takes over your credit balance and claims the money back from what is known as the Consumer Levy: a fund that ALL customers pay in to in the form of higher bills.

JJ_Egan

I am about 1 month in hand at this time of year no matter the supplier .

pokora

You should ask to lower your monthly payment instead of asking for a refund. But I must say that is normal to have a big amount in credit now to afford any big bill that comes now for the usual winter consumption.

Streaky_Bacon

It's your money so if you want it back ask for it, and tell them that if they want to keep it they need to justify it to you. Do it in writing and, if you are not happy with the justification, then you can take them to the energy ombudsman.

Suppliers and many people on this forum, will tell you that building up a credit balance for the winter is the way that it is supposed to be done. On the other hand, we often see people have to wait months for credit balances to be refunded in the event of supplier failure.

Ofgem advise against building up a credit balance.

https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/understand-your-gas-and-electricity-bills/energy-bill-credit-explained

Avoid building up credit balances on your account by giving your energy supplier regular meter readings. You can also contact your supplier and ask them to review your payment scheme in line with your estimated annual consumption.

If you’re concerned about the size of your balance, you can ask your energy supplier to refund it to you. Suppliers must do so promptly, unless there are reasonable grounds not to.

Your only real obligation is to make sure that you don't fall into debt. You can manage that by having a larger credit balance, or by having a smaller balance to smooth out any unusually high months (I swing from £60/month to £90/month for gas over the winter) and topping up with card payments if you have a longer spell of going over the direct debit.

I do personally keep about a month of credit on my account, but I am under no obligation to do so. I'm fortunate enough to not have to worry too much even if I do have to wait for months to get it refunded, but not everyone is in the same position.

Petriix

I don't see how you can avoid going into debt if you don't have 1 month's credit at the start of the month. Sure, you go back into credit again once the following month's payment goes through but that's not how it's supposed to work. Most of the smaller (reasonably} priced suppliers charge in advance.

Streaky_Bacon

Petriix said:

I don't see how you can avoid going into debt if you don't have 1 month's credit at the start of the month. Sure, you go back into credit again once the following month's payment goes through but that's not how it's supposed to work. Most of the smaller (reasonably} priced suppliers charge in advance.

Yes, I wouldn't personally consider the advance payment DD to be part of the refundable credit balance.

I have about a month of extra balance, so the DD goes out at the start of the month, then I have a month + the DD, and at the end of the month (if the DD is set correctly) I will just have the month's worth of credit (as a buffer in case of higher usage).

The OP's question reads to me, as if they are at the end of the billing cycle (DD paid and bill deducted), so the credit balance they have does not include the next DD.

DevilsAdvocate1

Thanks for all your replies and sorry for not coming back earlier.  The amount in hand is on top of the monthly payment - so for most of the month I am over £400 in credit but when my payment goes out then I am always at least £200 in credit.  I hope that makes sense.  I put my meter readings in every single month, so there are no estimates, and in hte last 2 years I haven't used more than I've paid for.  This time last year I was £100 in credit having just had £300 returned to me and my monthly payments lowered.

Anyway, I've asked for at least £200 to be refunded and they've offered just over £3.  I've replied, saying I want at least £200 back and they have replied saying that they think I should have at least one month in hand.  I guess I just reply again.

I can't see how I'm gonig to have a month with such a huge bill that it justifies me being £200 in credit.  Like I say, I've never used more than I've paid for in the last 2 years, which is why I keep building up a credit balance.  Just seems hard to get it returned to me.

MWT

DevilsAdvocate1 said:

... so for most of the month I am over £400 in credit but when my payment goes out then I am always at least £200 in credit.

...I can't see how I'm gonig to have a month with such a huge bill that it justifies me being £200 in credit. 

Their logic is simply that they want you to pay in advance, so if your next payment doesn't arrive you will have the money to pay for what you have used.

If they refund the whole £200 then there is no cover for the next months usage.

Many of the smaller suppliers work on the same basis, one month in advance to reduce the risk they take by supplying you on credit...

Petriix

If you keep building up credit then your DD is too high. Figure out how much credit you are accruing over a year (including any refunds) and divide that by 12 then reduce your monthly payments by that amount. £300 per year is £25 per month overpayment.