Energy Direct Debit huge increase

k_man

I agree with all 3 4 posts above (struggling to multi-quote), it is complicated, and many people struggle to understand, or don't want to spend time investigating.

Sea_Shell

Gerry1 said:

Sea_Shell said:

VMDD can work for those who are able to budget (and save) for their winter bills.

Unfortunately, the outcome would probably result in debts and defaults come Spring.  Especially for those not billed monthly.

Monthly means Monthly ! 

Oh so it does!!!

Still, won't help people who haven't budgeted for their January bill after overspending at Christmas!!


Is there such a thing as VQDD?

Ultrasonic

Didn't bills used to be quarterly bills for actual use by default? The change away from that was presumably because it was felt the current system would work better for more people?

I'll be honest it wouldn't make any practical difference to me either way so I have no strong personal views on this.

Gerry1

Sea_Shell said:

Gerry1 said:

Sea_Shell said:

VMDD can work for those who are able to budget (and save) for their winter bills.

Unfortunately, the outcome would probably result in debts and defaults come Spring.  Especially for those not billed monthly.

Monthly means Monthly ! 

Is there such a thing as VQDD?

Yes.  For some strange reason some suppliers change to Quarterly if you opt for Variable DDs.  That's why I want Ofgem to specify Monthly VDD must be available.  Quarterly is far too slow to alert to to high usage, especially in winter, and it's a much bigger amount of money to find even if everything is going smoothly.

VMDD with an opt out to FMDD would be the least worst compromise (with other opt outs such as Cash Cheque etc still available).

Chrysalis

Ultrasonic said:

Didn't bills used to be quarterly bills for actual use by default? The change away from that was presumably because it was felt the current system would work better for more people?

I'll be honest it wouldn't make any practical difference to me either way so I have no strong personal views on this.

Indeed it was, the problem is fixed direct debits are paid ahead instead of arrears, I expect most customers are in credit the majority of the time, so it effectively boosts the bank balance of the energy companies, giving them free cashflow.

This is probably the main reason its popular as its good for the shareholders, but customers get sold the deal on the basis "no need to worry about surprising high bills"  

Also the hike to standing fee's on the cap is down to the companies going bust losing many millions (might be billions?) in credit balances, which of course wouldnt happen with variable quarterly bills paid in arrears.

Not to mention if you pay for what you use, a high bill makes you pay attention and you cut back, people would have more money in their pocket, whilst a fixed direct debit masks it from you and instead you get the direct debit creeping up over time (too common story right?) so its done stealthily.  Plus what has been mentioned above with people been lured in on unrealistically low fixed direct debits on a new switch.

I do accept that for people who are bad at managing money fixed DD has a place, but I dont think it should be the default and ofgem has failed massively here.  Octopus in particular I have seen dozens of posts which consistently show they increase DD significantly above actual bill amounts.  There is people with 4 figure credit balances.

I cannot think of any other consumer service that is billed like this, usually its fixed DD for unmetered or variable for metered.  Its unique to the energy industry.

t0rt0ise

The idea of fixed DD was a good one but then the companies started taking the p!ss. The smaller companies with their higher DD in the winter and lower in the summer made no sense for the consumer but was to help the supplier. And Utility Point with their ridiculous higher in the summer and lower in the winter was doubly unhelpful.

It was Bulb's attempt to tell me that I needed to be £400 in credit that made me go the variable DD route. And that was not easy and took two goes of asking. My account still screams at me that I need to set up a payment schedule. They are all rotten companies, the whole lot of 'em.

Gerry1

t0rt0ise said:

They are all rotten companies, the whole lot of 'em.

The blame lies with dozy Ofgem for letting them abuse the system.  If one company takes the mickey, then the others are put at a competitive disadvantage, so they all tend to follow suit.

Ofgem should have spotted this problem years ago and taken effective action.  Instead, dozens of companies have gone bust, thousands lost their jobs and now we're all having to pay for Ofgem's incompetence via much higher daily charges.

Quarterly bills were OK in the days of the Electricity Board and Gas Board when the meter reader called regularly and you paid the relatively trivial amounts in cash in their High Street shop, but Ofgem's thinking seems to be stuck in that distant era.

k_man

Chrysalis said:

I do accept that for people who are bad at managing money fixed DD has a place, but I dont think it should be the default and ofgem has failed massively here.  Octopus in particular I have seen dozens of posts which consistently show they increase DD significantly above actual bill amounts.  There is people with 4 figure credit balances.

I have seen these posts too, but am surprised as Octopus allow you to set your own DD amount.

In fact, this is from the email notification about increased DD amounts:

If you're happy with this recommendation, you don't need to do anything. We'll adjust your payments automatically, starting from your next monthly payment. It's your energy account and you're in control - so if you'd like to set your payments to a different amount, you can do that here.

rhedyn

k_man said:

Chrysalis said:

I do accept that for people who are bad at managing money fixed DD has a place, but I dont think it should be the default and ofgem has failed massively here.  Octopus in particular I have seen dozens of posts which consistently show they increase DD significantly above actual bill amounts.  There is people with 4 figure credit balances.

I have seen these posts too, but am surprised as Octopus allow you to set your own DD amount.

In fact, this is from the email notification about increased DD amounts:

If you're happy with this recommendation, you don't need to do anything. We'll adjust your payments automatically, starting from your next monthly payment. It's your energy account and you're in control - so if you'd like to set your payments to a different amount, you can do that here.

Right, except when they don't, as per my other thread.  Octopus would happily let me increase my DD amount but would not let me reduce it below their seriously inflated estimate.  So now I am reducing it to zero (since point in their favour, they don't charge more if you don't do DD) since they wouldn't let me reduce it to £190.