Deleted

EssexHebridean

Jaybee_16 said:

I am currently £300 in credit with Bulb. If I want to reduce my monthly payments I have only one option which is to reduce my DD to a maximum of £3 per month.

After being pestered by emails a few months ago informing me that my credit balance was too high I reduced monthly payments by £20 per month but now Bulb want me to reduce further with £3 the only option but being mindful of what may be coming from April 2023 I want a credit balance to remain.

Just tell them no thank you. I mean they can take less than the DD amount, but I believe Bulb offer the option to make manual payments back to the account so you can just pay it back? Alternatively, open an interest paying savings account with your banking provider and stash the money saved into there - thus building yourself a "buffer fund" against future increases. We began doing just that a year ago - paying in the difference each month between where our DD was set and where we thought it was going to need to be set allowing for price increases, plus also any "extra" money that came along relating to energy costs - so the £150 council tax rebate, credit paid back from previous suppliers, and most recently the £75 awarded by the Ombudsman as a result of our successful case against UW. Right now that account has a 4 figure sum in it, and so far we've not needed to dip it at all - although we undoubtedly will do soon as having changed supplier right at the beginning of the winter period we are almost certain to want to make some manual payments over the next few months. 

deano2099

EssexHebridean said:

 Explaining that "I'm using less now" is completely irrelevant though - I could tell you that I am going to win the lottery this weekend on the basis that I've bought a ticket, but it doesn't mean it's going to happen!

The thing is though, it's both not trusting the customer, AND it's the customer's money.
Either/or I can get behind. Both together not so much. 
If a direct debit is set too low, then the company can bill the customer for the excess usage. It's not the end of the world. It's not like the system will automatically cut of their supply if that happens. Yes, Ofgem discourage this as they don't want customers getting into debt, but it's not a disaster.

If a customer says "I'm going to start paying less, because I'm going to use less" then they absolutely should be believed. Because ultimately they will be responsible for paying the extra if they get it wrong.

As others have pointed out, this isn't being done solely to keep people out of debt. The energy companies have taken this "advice" from Ofgem (which I seem to remember was the opposite about 5-10 years ago) and worked it into their business model, and those credit balances get spent. And when an energy company goes bust, they become a cost we all bear. Hence the Ofgem paper I linked that wants to force energy companies to protect credit balances and to make the right to a refund at any time absolute.

Because it isn't right for a company to both be able to set the direct debit at whatever they feel appropriate, and then also refuse to refund you when they get it wrong, until you reach a certain time in their calendar upon which they review it. It has to balanced in both directions: either the consumer sets the direct debit, but money paid into that account is difficult to get at - consumer's fault for setting it too high. Or the company set the direct debit, but the consumer can get it back whenever they want.

I can't think of any other industry where this is accepted. It's sort of like the more exploitative phone agreements where you do "pay as you go" except you have to top up £X a month or you lose your service and all your credit.

Chrysalis

Someone on bulb with £70 (actual) cost each month and over £700 credit was refused a request to reduce the DD from £140, after threatening the ombudsman, request was accepted to switch to variable DD.

ariarnia

deano2099 said:

I can't think of any other industry where this is accepted. It's sort of like the more exploitative phone agreements where you do "pay as you go" except you have to top up £X a month or you lose your service and all your credit.

water is an obvious one. and thats' worse to my mind because you can't even change company. 

deano2099

ariarnia said:

deano2099 said:

I can't think of any other industry where this is accepted. It's sort of like the more exploitative phone agreements where you do "pay as you go" except you have to top up £X a month or you lose your service and all your credit.

water is an obvious one. and thats' worse to my mind because you can't even change company. 

I can't really speak to other companies for that exact reason, but the default with my water company is a bill every 6 months which you can just pay, at no additional expense to doing a direct debit payment plan.
Yeah there are other industries where you can opt in to the sort of payment system than electric/gas uses, and generally the advice you see in places like this is not to do so, as you lose control of your own money. Elec/gas is the only place it's the default and hard/costly to move away from.