British Gas - why do they penalise you for paying against your bill?

Tank7

I am pretty sure I know the answer to this BUT how do they get away with this??

I have told them I refuse to pay them by DD as they will just keep increasing the DD amount so they hold my money!

I am currently paying them quarterly against my bill. They email asking for my readings, I send them, they bill me. I pay it..simple! So why do I get hammered for that according to articles I have read it can, or will be, up to 10% more than paying DD.

I object to them having all my money building up in their account so I have looked at the 'variable DD' which in my mind is exactly the same as me paying agianst my bill as the same system applies, send them readings, they take money against the bill but by DD!!  I am assuming that this is simply their way of getting your bank details so if they need to they can just 'take' your money from you!  I know you can cancel a DD arrangement if they mess you about but I am really annoyed as to why they hammer you for just paying them direct! I guess they will  say it is because it costs them more to process the payment but I can' believe that as I do it myself!

Has anyone taken this up with them, the fact they charge more, for payment against bill?

I will be calling them soon to ask them direct but I need to get in the right frame of mind and be prepared to waste an hour or so of my life that I will never get back!!

Be interested to hear if anyone has asked them why?

 

BUFF

You are being billed quarterly after you consumed the energy & you are doing so in a way that involves more administration.
It doesn't surprise me that they (& others) charge more for that than a monthly, automatic payment in advance. 

Spoonie_Turtle

If you want the discount for paying by the cheaper method (Direct Debit) without them holding a credit balance for you (variable DD) then they'll need the relevant details - i.e. your bank details - to be able to carry it out.

If you don't want them to hold any of your money AND you don't want them to have your bank details for variable Direct Debit, you have to pay because it costs them extra for other payment methods.

KxMx

On paper it's up to 10% more paying by quarterly bill, but to my mind that's debateable as the fixed DD amounts are often inflated to begin with. 

MattMattMattUK

KxMx said:

On paper it's up to 10% more paying by quarterly bill, but to my mind that's debateable as the fixed DD amounts are often inflated to begin with. 

It does not cost more because fixed/budget Direct Debits are just paying into a pot, not paying a bill, where as when not on Direct Debit the cost of the energy used is up to 10% higher which is the part that matters.

Cirrus1

Not with BG, but I pay my supplier by DD. Am billed monthly and pay in full. Benefits of DD and no build up of credit. 

matt_drummer

I think it does cost them more as they have to borrow money to fund 3 months of electricity and gas to you in advance of your payment.

They have effectively lent you/funded your energy costs for an average of just over 6 weeks.

matt_drummer

If you get a 7% discount for paying by fixed monthly direct debit as opposed to a quarterly bill in arrears then are you not effectively receiving 7% interest on your money free of tax?

It seems pretty generous to me?

matt_drummer

And that is 7% on your whole annual energy cost not just your credit!

I feel expecting a business to fund our energy costs for three months and charge the same price as somebody who pays much more quickly is wrong.

You have got to much much better off paying by `fixed' monthly direct debit than quarterly bills even if the supplier does have some of your money in advance.

FindMyWayBack

3 monthly? I though BG billed 6 monthly. I do the giving readings and paying for what I use monthly thing myself....

Exodi

Tank7 said:

...
I have told them I refuse to pay them by DD as they will just keep increasing the DD amount so they hold my money!

...

I object to them having all my money building up in their account
...

We seem to love to personifying various industries, with energy companies as greedy fat cats being one of the most common, but at times I feel like they just can't win.

Some people would much prefer paying the same amount, all year round for budgeting purposes. If they're expected to use £2,400 a year, they would be paying a DD of £200 a month. It is inevitable by doing this that one would build up a big credit balance in the summer, to be used to offset the much higher winter cost.

But of course , you and similar minded people would object to 'having all my money building up in their account' and complain 'why am I being charged £200 when my usage is £100?'.

If people then set their direct debits to reflect current usage, then you usually see the same people complaining why their direct debit is tripling in the winter.

My sisters have similar unjustified hatred towards energy companies - a deep-routed sentiment that they are being taken advantage of.

But it's one of the few services that I feel most protected against... you submit meter readings, you will ultimately only ever pay exactly for what you use. You also have (some) flexibility over what your DD is set at.

Tank7 said:

I will be calling them soon to ask them direct but I need to get in the right frame of mind and be prepared to waste an hour or so of my life that I will never get back!!

I'm not sure you'll get in the 'right frame of mind' but good luck with whatever you're hoping they will do for you.

If you're expecting British Gas will change their pricing model for one customer, I feel you will be left disappointed.

Lending money costs money, it's true in all walks of life.