DDs vs STOs

Brie

Ok so I know the difference between DDs and STOs.  No problem with that - the first the money is pulled from your account by a vendor and the second you are pushing it to the vendor.  If you don't have the money in the account either way the vendor gets nothing but you don't get a fee for bouncing a DD if you've got a STO instead.

Lots of people are concerned in the extreme about the rising energy costs and are thinking of switching from DDs to STOs with their energy companies which may put them on a higher rate.  Which is not helpful.  But STOs are more in their control and something one can budget for, even if it doesn't actually cover all your energy costs.

Is there any way to set a DD with a maximum?  Or with no option for the vendor to vary it?

Let's say you know you can afford £200 a month and absolutely no more.  But the energy company wants to put your DD to £220 then £275 then £325.  Like they tend to do.  But if they do that the DD will bounce and the customer will have even less money to pay them.  And the energy company won't get paid.

So isn't it better that someone be charged £220 a month for a tariff being paid by DD then £250 for not being on a DD?  And isn't paying £200 better than nothing?  Ok their debt will increase but it buys time for them to try to find more to clear the debit.  

The other side of the problem is that maybe you do have the £250 or £325 available in your account today but you need some of that tomorrow to pay the rent or council tax.  Again you would want to limit how much an energy provider could take.  

Just thinking things through since I heard about the Don't Pay campaign and wondering what would help people get through this easier.

[Deleted User]

No. As long as they give the required notice, it can be varied. You would need to switch to a standing order or other means of payment (or phone up to negotiate).

Brie

[Deleted User] said:

No. As long as they give the required notice, it can be varied. You would need to switch to a standing order or other means of payment (or phone up to negotiate).

So essentially you are forced to agree or cancel your DD thus being pushed against your will on to a higher tariff.  Sounds like once again the worst off in society are being ground down.

Bigwheels1111

There is no discount for DD on the standard tariff that most people are on now.

I ditched my DD and pay by debit card once a month after meter reading has gone in and bill is produced.

All done and sorted

Olinda99

You can pay by DD specifying only what you use.

So instead of eg £200 every month you pay for what you use - ie your bill each month - lower in summer and higher in winter.

blue.peter

You might be able to get your energy provider to agree to let you determine the amount collected by DD, and only change it on your instructions. This does, however, depend on the company.

I know that Good Energy does this, because it's the way that they operate my DD.

A few years ago, they introduced a new billing system. It was disastrously bad. Inter alia, its calculation of the amount to be collected, supposedly based on the customer's historical usage, gave ludicrous results in some cases - including mine. After a lot of hassle, the end result was that they agreed to let me control the amount that they collected. There's a little work needed on my part to ensure that my payments are sufficient, but I don't find it onerous. It's certainly delivered better results than their billing system. I suspect thhat I wasn't the only customer who had problems with it, because they quietly dropped it and replaced it again after a year or two. Even so, my DD collections are still under my control: I phone them whenever I decide that it needs to be increased.

I don't know which, if any, other companies offer this modus operandi. Even those that do will probably not want to advertise it.

sheramber

I have DDs with British Gas. They have never increased my DD.

They have notified me that I need to increase it due to usage which I have done. I don't know if they would have increased it if I hadn't done it.

sheramber

Olinda99 said:

You can pay by DD specifying only what you use.

So instead of eg £200 every month you pay for what you use - ie your bill each month - lower in summer and higher in winter.

That is fine if your finances can cope with large winter bills. The benefit of regular monthly payments is you spread the cost over the term rather than be faced with a large bill.

Daliah

Ovo let me adjust my DD to whatever amount I like. It takes seconds to do online.

If they estimate that I set it too low, they say 

If you change your Direct Debit to £xxx now, we estimate that you’ll be £xxxx in debit by the end of your contract.

Conversely, if I they estimate I set it too high, they say

If you change your Direct Debit to £xxx now, we estimate that you’ll be £xxxx in credit by the end of your contract.

I don't think I would benefit from replacing my DD with an SO, as the only payment options seem to be DD or debit/credit card. In addition, I wouldn't get my DD cashback.

Ovo send me a monthly invoice, about 2 weeks before the DD is due. So if I wanted to adjust it, I have plenty of time to do so.

MrFrugalFever

Brie, before Igloo went in to administration they allowed me to change my direct debit in the app (they had a minimum and a recommended amount), does you energy provider not allow this?

I have 3 direct debits currently and aspire to have no more. I have S/O’s for internal transfers to savings and the rest I generally insist on paying by bank transfer as and when I wish (within the dates specified for most of course). 

I paid council tax via standing order, credit cards via bank transfer and water by bank transfer and anything else I can get away with via BT to be honest. Yes there’s a risk of missing a payment if I don’t BT but I choose to take that risk.

k_man

Bigwheels1111 said:

There is no discount for DD on the standard tariff that most people are on now.

I ditched my DD and pay by debit card once a month after meter reading has gone in and bill is produced.

All done and sorted

Doesn't that depend on the supplier?