Do Energy companies purposely get you into debt?

Cardew

Nebulous2 said:

Some companies micro-manage DDs and it can be a real pain. We have a holiday house and how often we use it, and consequently the utility usage varies. 

British Gas were forever writing to me and reducing my DD when I wanted it left alone.  Then I had to contact them to ask them not to change it.  They only wanted quarterly readings which didn't help. 

I can sympathise about the holiday home. I have an annex that has very erratic occupation. Over the years with different companies the DD goes up and down like a yoyo. Last winter it was used far more than usual and I kept getting messages about increasing debt and why they needed to raise the DD and since then the DD has dropped it seems almost monthly.

It appears the ‘all seeing - all knowing computer’ has difficulty coping with large spikes in consumption, followed by virtually zero consumption. I once tried to ‘reason’ on the phone with a utility company rep with a view to preventing the above, but it is all too difficult; and of course all the cheaper tariffs insist on a DD.

brewerdave

Cardew said:

Nebulous2 said:

Some companies micro-manage DDs and it can be a real pain. We have a holiday house and how often we use it, and consequently the utility usage varies. 

British Gas were forever writing to me and reducing my DD when I wanted it left alone.  Then I had to contact them to ask them not to change it.  They only wanted quarterly readings which didn't help. 

I can sympathise about the holiday home. I have an annex that has very erratic occupation. Over the years with different companies the DD goes up and down like a yoyo. Last winter it was used far more than usual and I kept getting messages about increasing debt and why they needed to raise the DD and since then the DD has dropped it seems almost monthly.

It appears the ‘all seeing - all knowing computer’ has difficulty coping with large spikes in consumption, followed by virtually zero consumption. I once tried to ‘reason’ on the phone with a utility company rep with a view to preventing the above, but it is all too difficult; and of course all the cheaper tariffs insist on a DD.

OFGEM didn't do the "normal" user any favours when they tweaked the rules to stop the suppliers allowing debt to build up. When I first moved over to DD, it was simple   - expected usage/cost / 12 WHENEVER you started your tariff.regardless of the season.
 Now they either set the DD high or alter it virtually every month !! All in the name of "preventing" debt.

DiamondLil

Oh lordy yes, this is driving me nuts with my latest energy company. When switching, I provided exact usage in kwh, taken from the annual usage statement from our previous supplier. The new provider set the direct debit surprisingly low. And every month since (it was weekly at first) I receive emails telling me that I will fall into debt if I don't increase the DD. The latest email wants me to increase it to four times the original figure quoted by them when enticing me in. I'm beginning to think they want me to have a massive credit balance. As it is, I just pay any amount owing each month if it arises. And am counting the days until I can switch.

daveyjp

Other payment options are available.

jackieblack

Necrosis said:

So every time I change energy companies, I put in my annual usage from my last bill. When I start with he new company I raise my direct debit to ensure I don't go into debt. This time I went with EDF and paid 2 payments of £96 before raising it to £120. At the next bill they lowered it to £96 and refused to raise it again as they said I wasn't using enough. So 6 months on, I have a new bill, I'm in debt and I have to pay £147 a month. I don't mind paying for what I used but of course if they had let me pay 120 as I requested then my bills would be steady.

If you wanted to pay £120 a month but they would only collect £96, you could have put the other £24 a month aside, knowing that you would likely be owing it in the future, then use it to subsidise the increased payments 🤷🏻‍♀️

Robin9

DiamondLil said:

................. I provided exact usage in kwh, taken from the annual usage statement from our previous supplier. The new provider set the direct debit surprisingly low....................

How did the suppliers estimate compare with your actual figures ? If it was based on estimated figures then it can only be a guess.
Did you not question the original DD ?  There is an old saying - if it sounds too good, it probably is. 

dunstonh

Time and again we see threads like this.   And the common outcomes are the person is using monetary measures and not actual usage or they are using two bills, often over spring/summer and multiplying it to get the annual use (therefore not including the winter spike in energy use), or they have set the direct debit too low (and its the individual that decides the amount) or they have not built up any summer credit that can be used in Winter.   Or the most common of all...  They use estimated readings rather than Actual readings and the person never goes on to provide readings to the supplier.

Those that provide regular meter readings have no problems.  Maybe they should force smart meters on those types.:)

DiamondLil

Robin9 said:

DiamondLil said:

................. I provided exact usage in kwh, taken from the annual usage statement from our previous supplier. The new provider set the direct debit surprisingly low....................

How did the suppliers estimate compare with your actual figures ? If it was based on estimated figures then it can only be a guess.
Did you not question the original DD ?  There is an old saying - if it sounds too good, it probably is. 

Month by month, last year's usage compares very well with this year so far. The usage figure I provided at time of switching was the exact usage in kwh as provided by the monthly usage statements from the previous supplier. And yes, I use actual kwh used, not a monetary equivalent.

Of course I knew at the time that it was too good to be true, so am paying any deficit as and when it occurs. It just gets my goat that the company couldn't have provided an honest projection of monthly cost when I was comparing tariffs.

maisie_cat

I watch my energy every month, if I feel that I'm sliding behind I ensure that I have enough money to make the inevitable increased payments. If you are unable to budget, use the debit balance every month to make an additional manual payment, job done!

Cardew

dunstonh said:

Time and again we see threads like this.   And the common outcomes are the person is using monetary measures and not actual usage or they are using two bills, often over spring/summer and multiplying it to get the annual use (therefore not including the winter spike in energy use), or they have set the direct debit too low (and its the individual that decides the amount) or they have not built up any summer credit that can be used in Winter.   Or the most common of all...  They use estimated readings rather than Actual readings and the person never goes on to provide readings to the supplier.

Those that provide regular meter readings have no problems.  Maybe they should force smart meters on those types.:)

I am loath to disagree with such a distinguished contributor as Dunstonh but IMO he is missing the point about this issue and BrewerDave in his post(I wish posts were numbered as they used to be) has hit the nail on the head.

It is the company’s fear of customers building up a large credit or debit balance and thus the company falling foul of Ofgem that causes problems.

I know the annual consumption of my main house and rarely have problems. I don’t know the annual consumption for my annex because it varies  – and I have had it 30 years. I give them an estimate, say xxxxkWh and they give me a monthly DD figure.

So in the first few months I use very little and the ‘all seeing all knowing computer’ reduces my DD drastically to prevent a build up of credit. Then it is used heavily for a couple of months and the DD is massively increased to prevent a build up of debit.

The use of smart meters will not prevent this issue.