Energy firms face 3 week deadline in review of direct debit hikes

Gerry1

facade said:

I really can't see a problem with fixed monthly DD...

Actually, I think you can... ↓

facade said:

...when the delayed standing order/DD goes through they go into the red and are hit with charges, or it bounces and they are hit with charges.

Agreed, Variable Monthly DD isn't for everyone (that's why there must be an opt-out), but if someone's usage is excessive it's far better that they get a warning the next month when they can take swift action to nip it in the bud, not a massive catch-up bill six months or a year later when the serious damage has long been done.

molerat

This was on BBC Breakfast this morning.  Some absolutely awful reporting along with many mentions of the ubiquitous 54%.  One viewer comment was that they had just come off a 2 year fix and their DD had gone up from around £200 to £600 and that their usage hadn't changed so it can't be right with no comment from the reporter that it is possibly correct in those particular circumstances. The general theme seemed to be coming off a fix and the reporter just made a passing comment on this, the biggest problem seems to be a lack of understanding.  My personal 1/12th EAC has gone from £82 to £210 so none of the figures reported in the article seemed too outrageous to me.

johnbhoy70

It really is the blind leading the blind!! What chance have some  poor sods got when even reporters/journalists covering the subject don't even seem to get the simple fact that the recent figure used for the increase was for standard rates and that somebody coming off a 1/2 even 3 year fixed rate onto a standard is going to get financially poleaxed!!

StartledJesus

There are some terribly patronising comments on this thread, albeit possibly unintentional. Should posters really be casting aspersions about the fecklessness of others, and their level of intelligence, or their ability to comprehend, budget, manage, choose or whatever you want to call it.

As Ian Dury used to say - 'there ain't half a lot of clever bar stewards'. I just hope it stays fine for the parties concerned, and that they never encounter any problems, of any sort, or require any sort of support or empathy or solidarity. 

johnbhoy70

StartledJesus said:

There are some terribly patronising comments on this thread, albeit possibly unintentional. Should posters really be casting aspersions about the fecklessness of others, and their level of intelligence, or their ability to comprehend, budget, manage, choose or whatever you want to call it.

As Ian Dury used to say - 'there ain't half a lot of clever bar stewards'. I just hope it stays fine for the parties concerned, and that they never encounter any problems, of any sort, or require any sort of support or empathy or solidarity. 

I read them differently personally.......more like digs at the industry and the regulator, who both really should know better, and their quality and level of communication. It's on them in my opinion and not the average punter who is sorely paying now.

I'd put good money down that a fair % out there still don't fully understand the price cap and i'm not blaming the customer for that.

StartledJesus

@johnbhoy70 Fair point, on the other side of the fence, and I'm definitely not defending the suppliers, Government or Ofgem.

The whole process is far more complicated than it should be, or needs to be. There is no doubt that the suppliers have made the situation worse with appalling customer service and access, procedures and systems, and poor staff training. Often the response from suppliers and their IT and billing systems is utterly unforecastable, both in terms of value or timing. Personally, I have found myself having to look at my energy accounts, pretty much on a daily basis, for the last 7 months. Just to see what has happened on my account since I last looked, and if action is required. Who wants to be doing that? 

[Deleted User]

facade said:

Gerry1 said:

It's really quite simple: all suppliers should be obliged offer Variable DD.  It should be the default, but customers should be able to opt for Fixed DD if they can't budget for themselves, having been firmly warned that it's never All You Can Eat.

I agree they should offer variable DD, but as I said in another post, it would make the account standard credit if the DD is calculated after the energy is used, how could they calculate it before?

I really can't see a problem with fixed monthly DD. I use it, and I am quite capable of budgeting.

How I would budget is to estimate the energy bill for the year, divide it by 12 and then put the difference between the Summer monthly bill and the 1/12th aside ready to fund the deficits in Winter.

Which is overall the exact same thing as fixed monthly DD- except I have to not spend the accrued float, and it hurts a lot more to pay out for a big bill in Winter.

There are a lot of people who effectively live hand to mouth, and anything left in their bank account at the end of the month is theirs to spend. So if they "find" £100 they spend it straight away on sweets and beer, not questioning for a second where it has magically come from, and when the delayed standing order/DD goes through they go into the red and are hit with charges, or it bounces and they are hit with charges. Trust me, they could never build up a float to pay the Winter bills.

The answer is that they cannot.  The customer needs to supply the reads to them either via smart meter or manual reads.  Taking Eon Next (myself on Variable DD).  The manual reads generated the bill within a day.  In my case £66.92 for the period 1st April - 30th April (inc).  The statement informs me that they take out this amount on 17th May effectively making it payment of bill approx 17 days in arrears made by a DD mandate.

Fortunately I am able to budget reasonably well and have already put by enough for Winter 2022/23 so as not to put a strain on my household finances even with a 30% estimated rise in the cap in October and also taking into account that my current tarrif runs out on 1st October.  I agree that Variable DD is not the way for some/many but it should be something that Ofgem can promote with all energy suppliers at least as an OPTION as Gerry1 states.  I have never been aware about Variable DD until I went to Eon Next.  

Thrugelmir

facade said:

wakeupalarm said:

If the energy companies end up being fined, will they pass the cost on to consumers?

Obviously they will. They are hardly going to pay out of their own pockets.

wakeupalarm said:

will they become at risk of collapse?

Depends on the substantialness of the fines, cashflow is tight at the moment.

wakeupalarm said:

If so and based on what happened last year, should we make sure we cancel our DD or at least change to pay on receipt of bill?

They can charge more for this, it is called standard credit, and the cap is about 6.5% higher.

wakeupalarm said:

Would it be wise not to build up a high credit balance with a energy company in case they do collapse and then have to wait half a year to get our money back?
Will we then have to pay increased cost due to SOLR process?
Will there be any energy companies left?

All yes.

Someone has to supply energy. You would think that a single state run entity, without duplicating layer upon layer of profiteering middlemen could do it cheaper than private companies, but for some reason I don't understand this apparently isn't the case...

State enterprises have no need to be efficient. That's a well trodden path throughout history. 

Thrugelmir

StartledJesus said:

There are some terribly patronising comments on this thread, albeit possibly unintentional. Should posters really be casting aspersions about the fecklessness of others, and their level of intelligence, or their ability to comprehend, budget, manage, choose or whatever you want to call it.

As Ian Dury used to say - 'there ain't half a lot of clever bar stewards'. I just hope it stays fine for the parties concerned, and that they never encounter any problems, of any sort, or require any sort of support or empathy or solidarity. 

General standard of comprehension is pretty poor these days. Numeracy skills likewise aren't good. 

wrf12345

For online accounts increases in DD should only happen after the customer has given permission, or at least have the opportunity to reject such a request without needing to spend an hour getting access to a chat line - energy companies love the illusion that they have control of your bank account. I suspect a large cohort of customers have radically reduced their electric consumption and turned off their gas at the meter - very green but a disaster for companies trying to recover all the money they lost in the prior six months - and therefore no need for an increase in DD.

On another note, I have written to my MP to point out the outrageous increase in s/c's on the electric bill that cause a disproportionate percent increase for low energy users and have demanded that the responsible Ofgem employees are sanctioned for such abuse of energy customers and their ignorance of encouraging low energy use.