Utility Warehouse security deposit

timseal

Hi, so I rang UW today as a potential new customer and they said that as a tenant I would need to pay a £200 deposit per service, so £400 for gas and electric. When I asked how that money is protected against say UW's financial failure, no one could tell me anything. Does anyone know how these deposits are protected? Thanks

marcia_

 Not a clue but I wouldn't be paying a deposit. Go to a supplier who doesn't require a deposit 

DullGreyGuy

Presumably this will just be credited to your account so your balance will just start at £400 in the black rather than the normal £0. In which case its protected as any other positive balance you hold with a supplier that may go bust. https://www.ofgem.gov.uk/news-and-views/blog/how-youre-protected-when-energy-firms-collapse 

marcia_

 but maybe not Wouldn't they want to hold on to the deposit separately in case the client stops paying at some point? 

DullGreyGuy

marcia_ said:

 but maybe not Wouldn't they want to hold on to the deposit separately in case the client stops paying at some point? 

Thats exactly why they fight to stop people withdrawing all their positive balance if on fixed DD and coming up to winter

timseal

DullGreyGuy said:

marcia_ said:

 but maybe not Wouldn't they want to hold on to the deposit separately in case the client stops paying at some point? 

Thats exactly why they fight to stop people withdrawing all their positive balance if on fixed DD and coming up to winter

Sorry so are you saying the £400 does work as a credit that disappears after a month or 2 or is kept separately? If the latter I can see that Ofgem replaces the supplier if firm goes bust, but not how it protects the £400. Thanks

DullGreyGuy

it wont disappear after a month or two as you will presumably be making your fixed monthly DD payments and so it may be eroded or added to depending on how accurately they've set the DD -v- your actual usage.

EssexHebridean

DullGreyGuy said:

Presumably this will just be credited to your account so your balance will just start at £400 in the black rather than the normal £0. In which case its protected as any other positive balance you hold with a supplier that may go bust. https://www.ofgem.gov.uk/news-and-views/blog/how-youre-protected-when-energy-firms-collapse 

UW are unable to credit amounts not paid as "budget plan" direct debits to customer's account - so I'd doubt that they would be crediting it that way. My experience of UW is that anything paid outside of the regularly collected "budget plan" payments gets swept off quietly out of the customer's view in the hope that the customer then forgets about it. At the time of leaving UW, it is then close to impossible to get that money back. 

I'm with those saying I wouldn't join a supplier that wanted this sort of thing, but especially not UW - there are plenty of other options out there, and it's unlikely that UW will be any cheaper than any other for most people right now. 

ChaunceyGardiner

timseal said:

Hi, so I rang UW today as a potential new customer and they said that as a tenant I would need to pay a £200 deposit per service, so £400 for gas and electric. When I asked how that money is protected against say UW's financial failure, no one could tell me anything. Does anyone know how these deposits are protected? Thanks

Who is/are the current supplier(s)?

StocktonFlyer

I switched to UW last year through the MSE Cheap Energy Club. No deposit was required and not even an "in advance DD" that I had on previous switches to other suppliers.

It took them two months to take the first payment. They have never seemed that interested in taking my money. I had to prompt them to up my DD when the price cap changed so I didn't fall into even deeper arrears.

This may of course explain why they are now rethinking this approach.