Can I cancel my direct debit to recover the credit I’m owed on my live energy account?

JLP295

Hi everyone,

I’ve seen a few posts regarding trying to get a refund from energy suppliers when in credit with them, but I have not seen the questions and answers to an idea I have to recover mine, and so wanted to ask.

Utilitypoint are my energy supplier for both gas and electric. I am now £300 on credit with them, and my contract runs until January. I phoned up and requested a credit 6 weeks ago. They only agreed to a refund of £130 (which frustrated me as I argued for the full amount). They said the refund would be issued within 6 weeks, however they have failed to pay it, despite me chasing them.

I am considering taking matters into my own hands by cancelling my Direct Debit, and continuing to use energy until my credit is used up. In reality, my contract ends in January, and so even if I don’t pay another penny from now until then, I am unlikely to use £300 worth of energy (the value of my credit) by then. 

The question is: can I get in trouble for this? Am I in breach of contract? Could doing this affect my credit score? 

I find it difficult to understand how it could, when I don’t owe them any money. They owe me. 

If anyone knows your response would be much appreciated.

TheMilkmansDad

The question is: can I get in trouble for this? Am I in breach of contract? Could doing this affect my credit score? 

I believe the answer is yes to all. *edit posted too soon!

You would be in breach of contract as you've signed up to pay a monthly amount so in effect you'd be in trouble and a late payment would be marked on your file.

As a general reminder/pointer - you should be in credit this time of year so asking for a full refund would only mean your DD would increase come autumn/winter.

[Deleted User]

I would listen to UP. At this time of the year, most consumers will have a credit balance to cover the months when the CH is on. When consumers do manage to recover all the credit balance, then they are somewhat surprised when they see that their monthly DD amount has been increased. Suppliers do not consider themselves to be lenders.

To answer your original question. Cancelling you DD may breach the terms and conditions of your contract: it should all be there in the small print.

Finally, credit and debit balances are meaningless in that they are only valid for one day and THEN only if they are based on an actual meter reading.

Inigo_Montoya

if you cancel the DD there may be a penalty charge and/or you are may be placed on a more expensive version of the same tariif

you need to check the terms and conditions

JLP295

Thanks for the answers.

Just to clarify on the other points you raise: My account is based on actual readings, not estimated, and I am aware it is common to have a credit in the summer. My situation is that after they reduced my DD, I am now paying a DD of £30 per month, and using £30 per month energy. ie maintaining a credit of £300. Likely in October when I start to turn on the heating my bills for October through to January when my contract ends I will use £45 per month energy. So using £15 more than I pay for those 4 months will only reduce my credit to £260 by the time my contract ends and I look to switch in January.

JLP295

(as I said in my first post - even if I don't pay a penny more from now until when my contract ends, I will not use enough energy to recover the £300 credit)

JLP295

Sorry for multiple posts. Taking all above into account - is there anything else you would recommend if you were in the above situation?

Gerry1

You may wish to switch to Variable Direct Debit where each DD is for the exact amount used in the last billing period, but unfortunately not all suppliers offer this.

PRAISETHESUN

I also wouldn't cancel the DD - that will likely lead to other issues, such possibly losing a discount for paying by DD or ending up in debt if they miscalculate your usage and massively overcharge you (always better to be chasing a refund than to be asking for a debt to be cancelled!)

Accept the partial credit refund they've offered and then submit a separate complaint for the remainder. In the worst instance, it will all be refunded when you switch suppliers in Jan. I agree that your usage may increase over the winter so it makes sense to keep some credit, but I agree a £300 credit is a bit excessive if you've not got a history of bills that large.

p3ncilsharpener

5.7 You agree to pay for your energy by monthly automatic payment by Direct Debit which you need to set-up as a condition of us working together and supplying your energy. Should you fail to maintain payments at the correct level you may be moved to our current Variable Plan without notice. Once your account is up to date you may then choose any plan that is available at the time, which will be subject to its own terms and conditions.

6.2.2 And your payment method is automatic payment and you do not make a payment to us on the date it is due by another means, we can charge you £15 for each missed payment to cover the administrative costs of recovering outstanding payment. We may use third-party agents (for example Debt Collection Agencies, High Court Enforcement companies) to recover any debt due to Utility Point or to discuss the need to increase your regular instalments to cover usage. 

Probably not a good idea to cancel the DD.

greenguppie

JLP295 said:

Hi everyone,

I’ve seen a few posts regarding trying to get a refund from energy suppliers when in credit with them, but I have not seen the questions and answers to an idea I have to recover mine, and so wanted to ask.

Utilitypoint are my energy supplier for both gas and electric. I am now £300 on credit with them, and my contract runs until January. I phoned up and requested a credit 6 weeks ago. They only agreed to a refund of £130 (which frustrated me as I argued for the full amount). They said the refund would be issued within 6 weeks, however they have failed to pay it, despite me chasing them.

I am considering taking matters into my own hands by cancelling my Direct Debit, and continuing to use energy until my credit is used up. In reality, my contract ends in January, and so even if I don’t pay another penny from now until then, I am unlikely to use £300 worth of energy (the value of my credit) by then. 

The question is: can I get in trouble for this? Am I in breach of contract? Could doing this affect my credit score? 

I find it difficult to understand how it could, when I don’t owe them any money. They owe me. 

If anyone knows your response would be much appreciated.

You can cancel your direct debit mandate at any time.
You would have been told this as part of the Direct Debit Guarantee,

To cancel your DD mandate, the simplest way is simply to contact your bank (or most online banking arrangements can allow you to make the cancellation), but you should also inform the supplier as it also states in the DD guarantee.

Will you find yourself in difficulties? Almost certainly.

I think UP charge for an unpaid direct debit (as do most suppliers). I think UP charge £15 per occurrance. They will probably add VAT to that price too (@ 20%) - UP are notorious for quoting prices excluding VAT.

They may report failed payments to a credit reference agency - refer to the terms you agreed to.

The terms of your current contract may also allow them to transfer you to another tariff if you don't keep up with the payments by DD. That alternative tariff will almost certainly be more expensive. You need again to refer to the terms and conditions you agreed.

If there is an early exit fee applicable to your current tariff, and the supplier switches your tariff due to you breaching the agreement, they will probably stuff you with the early exit fees of your current tariff too. UP are notorious for applying early exit fees whenever they can. (They are usually quoted ex vat too by UP)

Best advice would be to contact UP and discuss your possiblle alternatives.
The supplier should be giving you a full refund of the any accrued credit on request, unless the terms you agreed to expressly state otherwise. Of course, if they provide a full refund, then they may say they want to increase the amount they collect from you every month.

If you are in credit to the sum of £300, then you may be able to argue for a reduction in your monthly payment.

More information is available in this useful MSE article:
https://www.moneysavingexpert.com/utilities/lower-energy-direct-debits/

If you have cause for complaint, the supplier has a complaint procedure available to follow here:
https://www.utilitypoint.co.uk/wp-content/uploads/2021/08/Utility_Point_Complaints_Procedure_040821.pdf

Edit:
By your later post in this thread, it looks like the supplier offered you a partial refund of your credit balance, combined with a reduction in your monthly payment. Presumably you accepted that proposal.
You will probably have difficulty in attempting to renegotiate that agreed resolution just 6 weeks later, unless you can prove a substantial change in circumstances (e.g. the property has since become empty and so consumption will not be as it was at time of resolution)

If you have not received the partial refund as promised, then contact the supplier to find out why.