Orbit Energy - Bust - Has been overcharging unit prices with no notice

Joosh

Hello all,

I've got an issue with Orbit Energy.

On 22nd May 2021 we switched onto their Spring Vari-Save Extra tarrif and were happily ticking along until 22 September when they sent us a letter telling us our Direct Debit payments were increasing from £177 to £223 per month as of 22 October.

The stated reasoning was the following:

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"We've reviewed your account and your monthly payments need to change to ensure you are paying the right amount to cover the cost of the energy you are using.

We do a review at least every six months and the most common reasons for a change are:
- tariff prices may have changed or be changing soon
- the amount of energy being used may have increased or decreased (or be different to the information we received when you joined)
- a payment may have been missed.

You can find out more about how Direct Debit payments are calculated in our FAQs."

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This was all it said. It made no further mention of anything and there was no further communications on the online account. No details as to what actually caused the change.

Our energy usage was around £120 per month so it made no sense but we couldn't get hold of Orbit to find out. Their only method of contact is via a form on their website which I got no reply to, nor any confirmation that my communication had sent.

After receiving our bill on 26th October (covering 22nd Sept to 21st Oct) it revealed that the tariff prices had changed dramatically on 01st October. This was the first communication we received showing us these tariff changes. 

My assumption was that energy providers need to give 30 days notice of a tarrif price change, and state the changes, meaning our rate prices shouldn't change until 26th November. Even if the vague Direct Debit letter counted as notice (despite having no detailed information on it) that was only 8 days before the change on 1st October.

My attempts to contact them have failed, but I believe we have been overcharged by Orbit and they have failed in their obligations to provide sufficient notice.

Sadly, and annoyingly, they have now gone bust. Due to our large direct debits we are almost £700 in credit which I am confident we will get back from the new provider, however I am unsure who is responsible for dealing with any additional refunds due because of the improper notice period for rate changes. Would that also be the new provider as they are assuming responsibility for Orbit customers?

Any advice would be much appreciated please!

Thank you,
J

MWT

Joosh said:

Sadly, and annoyingly, they have now gone bust. Due to our large direct debits we are almost £700 in credit which I am confident we will get back from the new provider, however I am unsure who is responsible for dealing with any additional refunds due because of the improper notice period for rate changes. Would that also be the new provider as they are assuming responsibility for Orbit customers?

The new supplier is not obliged to deal with unresolved complaints against your previous supplier unless the problem is on-going (a faulty meter for example).

The Ombudsman will not deal with complaints against them as they no longer have an energy licence.

You can contact the administrators for the failed company but your chances of a result are low.

Have you worked out how much the tariff change has cost you up to the appointment of the SoLR?

Curiousgirl1

The tariff you were on is call Spring Vari-Save Extra. That indicates to me that it is a variable tariff, possibly tracking the Standard Variable tariff? If so it could be in your T’s & C’s that it will change automatically when the SV tariff changes. 

najan49

I was on the same tariff.

On 18th August I got an email from Orbit saying the tariff was ending and that I would be moved onto the standard variable rate from 1st October.

[Deleted User]

Consumers really need to get out of the mindset that an increase in the monthly DD means that price has increased. This could be the situation if the consumer is on a fixed tariff and it has come to an end; equally, it could mean that the consumer has been consuming more energy than was envisaged when the payment plan was first set up. Payments made are nothing more than a credit from which actual charges are deducted.

QrizB

Here, from an old thread (posted19th August, much the same time as najan49 says):

https://forums.moneysavingexpert.com/discussion/comment/78549243/#Comment_78549243

Orbit Spring Vari-Save Extra is ending on 1 October and moving to a rate about 60% higher. Lasted over 6 months at a cheap rate which is fair enough. Time to move now.

Did you not receive an email around then?

Joosh

Thanks for the responses everyone. I'm not assuming a DD increase means a cost increase, I understand that they are different hence the Orbit communication wasn't very clear as to the reasons.

I did not receive any communications on or around 18th August, not in my emails or on my online account under the "Bills and Communications" section. After the "Switch Complete" email/communication on 22nd May, the next communication was our bill on 21st September which covered the period 22nd May - 21st August. We had been chasing them to find out what was going on as we had been provided our DD as instructed since the switch and had heard absolutely zero from them in that time.

To this day I never received a reply to a single one of the messages I sent them on their online form (again, their only option for communications from consumer to supplier).

The sudden increase to the rates was not prewarned. I was aware that Energy Firms were increasing prices one-by-one but hadn't heard from Orbit other than the DD increase which I assumed was due to summer ending and going into winter as they didn't specify any actual reason, and no info said otherwise on the Online Account.

Cheers,
J

Joosh

I'm thinking that they forgot to send us the price increase letter for the same reason they forgot to send us bills in April, May, June, July and August. 

With them going bust prior to getting a complaint in it looks like poor timing for us. The actual bill increase is about £100-110 on the latest month alone (Oct-Nov) with old and new rate figures! Up between 60-70% before VAT is added. Not good.

QrizB

If it's any consolation (and I doubt it will be), and assuming Orbit were charging roughly the Ofgem cap (25p/day SC per fuel, 4p/kWh gas, 21p/kWh electricity), your new tariff with your Supplier of Last Resort (SoLR) won't be any higher.

The SoLR process will also make sure you keep your Orbit credit but won't be responsible for any other liabilities (notice period compensation, for example).

Joosh

Thanks. It's inevitable I suppose we would have been paying this much, just the bill jump was a bit of a surprise. In this instance I think we may have no recourse so will just have to deal with it. I'll bring it up with the new supplier anyway and see. Not holding my breath, if I find out otherwise I'll post here in case it's of use to anyone else pursuing an Energy Company for something that subsequently went under.

MWT

Joosh said:

With them going bust prior to getting a complaint in it looks like poor timing for us.

Even if you had got a compliant in, the outcome would have been the same, as soon as they lost their energy licence the Ombudsman would have dropped the case.