Media portrayal of energy issues - what would be better (and work)?

ariarnia

[Deleted User] said:

2. The confusion between the monthly direct debit amount and the actual bill / cost of what is being used. I'd resolve this by  requiring energy companies to give everyone with a credit meter a monthly bill or estimate, making it clear whether that is an actual bill based on a reading (and whether that is from a smart meter or the customer) or an estimate. These should be made to look obviously different so every customer knows whether they are looking at a "Bill" or "Estimate". As far as paying the bill is concerned, customers should be given the option to pay it in full there and then (using whatever payment mechanism they choose from the options the supplier offers) or opening a completely separate "budget account" to allow them to spread the cost of paying the bill. People with a budget account should get a monthly statement, completely separate from the bill, which shows how much has been added to the budget account that period (from the estimate or bill) and how much has been paid off (i.e. the direct debit amount).  Ideally (but not essentially) the budget accounts would be offered by financial instituions and subject to all the same mechanisms, protections and controls as other financial services. Estimates for monthly use should be based on an Ofgem agreed methodology that all suplliers shoud use, with a standard mechanism across all suppliers for dealing with anyone who doesn't think their estimate is appropriate.

not the ofgem bit but that sounds like what water companies do. we get a bill every 6 months i think (and we take and give readings becuse i don't think they've been out to see it since at least before covid) and its got BILL written on it saying if we are in debt or credit/we don't have to pay anything because we have a DD and the DD amount. then on our account we can see the payments building credit to the next bill. 

Spoonie_Turtle

Need an article based around giving your own meter readings - and check your bill is using them - 'to stop your supplier ripping you off' (to them overestimating your usage and charging you more than is sensible - or underestimating, getting into debt, then leading to massive DD amounts later).

Also include making sure you're with a supplier who bills monthly 'to save money' (to get a more accurate estimated usage and therefore not inflated DD amounts). 

Winter is certainly the best time, when people's bills are most likely to be or become higher than the DD amount!

Edit: also such articles would need to be less adversarial than the headlines - explain fit the meter readings that your supplier can only go on the information they have, and if you don't give them information then that's not on them.  With the DDs, explain they need to make sure customers don't get into debt that they can't repay (and explain how that affects customers, not just the supplier taking the hit).  People love to get angry about the idea of RipOff Britain and are quick to assume energy suppliers are out to get them - not that some suppliers help themselves there, with the lack of actual assistance when customers need it - whereas really the decent ones want to work with people, and they all have a duty to try to help in certain circumstances.

Also storylines in soaps and other popular programmes are actually really effective.  Plus ad campaigns to read your meter every month, to check your bill, etc. would also help.

There's nothing that will fully fix it, nothing that will persuade everyone to take responsibility (and not everyone can, far too many people don't have the support they need for daily life), but a lot of people simply haven't understood and would happily be more proactive if they were clearly told and shown how. 

Even switching suppliers was a fairly mysterious process, quotes given in monthly DDs and using estimates unless you made the active choice to put on your own annual consumption.  So it was a step in the right direction of saving money, but not actually exposing people to how energy billing works.

[Deleted User]

Deleted_User sa

The question would be how to determine what is a sensible amount for a top-up and getting people to actually top up that account - perhaps an 'independent third party' using an approved method (although if it's a regulated method, anyone should be able to do it and get the same results) - and how to deal with cases where that system isn't working (no meter readings etc) before getting to large unpaid debts to chase.  Or do you think that people would just use the top-up function automatically to avoid big winter bills (like christmas savings schemes in a supermarket)?

In many ways, I think that is the crux of the current problems and the hardest one to solve.

When folks post on this board and it's evident they haven't understood the distinction between the monthly direct debit and monthly usage/bill it's not difficult to explain. And where, in the past, estimates have been good the distinction isn't hugely significant anyway from the point of day to day life and paying the bills. So just making a clear distinction between the "budget account payment" and the "bill" by separating them should do the trick.

But, and it's a big but....

The essence of the monthly direct debit / budge account system is the supplier says to you "I tell you what Mike, we've looked at your bills and we reckon you'll use about £1200 of electricity over the next 12 months. So why don't you just pay us £100 a month and we'll settle up at the end of the year, either by giving you some money off your next years bill or giving ut you back. Or if you haven't paid enough, we'll add it to next years bill or you can pay us what you owe to square things up."

This has worked fine for most people for years. But it only works well if the estimated year's bill is reasonable, otherwise you get the large debit and credit balances and/or swings in payments that's throwing folk into a state of confusion at the moment. And at the moment a number of things have made it difficult to make a reasonable assessment of the annual cost:

1. We've had a pandemic, people have been at home more so usage patterns have changed. Last year's usage is not necessarily a good estimate of this year's usage.

2. Prices have changed so dramatically so quickly that it's difficult to estimate future costs even if you have a good prediction of what you're going to use.

3. Because costs have gone up so rapidly, people are turning down the thermostat, again making it difficult to estimate the costs.

4. This is overlaid with a war that can't be predicted and what I think could reasonably be called a chaotic and unpredictable system of government intervention (or maybe even government!)

The best I can think of is that (1) there should be a standard methodology for estimating usage, overseen by Ofgem, with an agreed process for challenging it (2) budget account payment schedules should be aligned with price cap / intervention review dates (i.e. if the government/Ofgem announce a 10% increase in rates in April, everyone's top-up, direct debit, budget account payment or whatever you call it should go up by 10% in April (subject to any "squaring up" to sort out previous under or over payment).

deano2099

It needs to be reframed around something else people can understand. Best I can think of is that we stop using terms "bill" and "direct debit" for the £X the supplier charges every month, and start calling it a "top up". That's ingrained in at least a large portion of the population. Make it clear that the energy company are suggesting how much they think you should "top up" every month, but if you top up too much, you can get it back. If you don't top up enough, you'll have to pay more.
Bills should show a graph with "you topped up this much" and "you used this much".
It's still a mess because of the much increased costs in winter and spreading it over the 12 months but it's a start.
For all customers with smart meters, people need to be told about the apps available, and it should be a standard service that you can sign up for a text every week which tells you what you've spent that week.
For those without smart meters, should be able to enter meter readings and get the same.

None of these are *good* solutions by the way. But we are where we are and getting to where we need to be is a long journey.

[Deleted User]

The more I think about it, the more I think that "top-up" is the right wording to use and would help to solve much of the issue - not the media portrayal, but the actual problems that people come here with.

"We're increasing your automatic top-up because you're using more than we thought/because the price you pay has changed" 

"We spread our best guess of your total bill over 12 equal top-ups so you don't need to find extra money in winter"

[Deleted User]

wittynamegoeshere said:

I suspect that the reality is that the industry likes that customers don't understand their prices, how much they're using or much else and are resigned to just handing over however much they ask for and not asking questions.

Dumb is the way that big business likes its customers, in fact they probably put a fair amount of effort into making it more difficult to understand, otherwise they might start shopping around and the cartel might have to start actually competing against each other.

If that was true, all you would need is one company that didn't do this - they would get all the customers, make all the profit, and put everyone else out of business.