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

Olinda99

BG offer a discount  for paying by DD.

If you choose not to take this offer up that is fine. No-one will disagree with your decision.

[Deleted User]

All businesses incur the ‘Cost of Doing Business’ which has to be reflected in the charges that they make to their customers. For example, my wife placed an online order with a major store yesterday: it had three delivery options ranging from Free to £5.99 couriered delivery.

The simple truth is that consumers do not like paying energy bills which is why we get continuous posts about scams; fraud; ‘getting away with it’ etc…..

The OP’s problem is easily solved by setting up a variable DD which takes payment whenever a billing charge is raised. That said, it is up to the consumer to ensure that there are sufficient funds in the account so that the charge is not rejected which will, at the very least, incur a late payment charge.

Cirrus1

Exodi said:

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 winter.

I’m one of the people who pay DD in full monthly. I consume more in winter, ergo I pay more in winter. It’s not rocket science. Nothing to complain about!

MattMattMattUK

Cirrus1 said:

Exodi said:

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 winter.

I’m one of the people who pay DD in full monthly. I consume more in winter, ergo I pay more in winter. It’s not rocket science. Nothing to complain about!

People complain about a lot of things, their complaint can be entirely their own fault, baseless or invalid, but they will still complain because they lack the will to understand. 

t0rt0ise

For some the complaints are because they remember how things used to work. I'm talking years ago. That's why some never give meter readings. Simply because back then there was no such thing as reading the meter yourself. There was also no such thing as paying in advance. Although everyone does have to catch up with how things are done today, it would be helpful if others who didn't experience how it was, would at least try to understand why people think the way they do.

matt_drummer

I am old enough to remember meter readers and quarterly bills.

And, you can still have quarterly bills if you wish from some suppliers.

But the title of the thread relates to being penalised for going this way, well you are not really penalised. 

Quarterly bills and payments are the standard price, but if you want to pay a `fixed' monthly direct debit based based on your expected usage then you are rewarded with a discount.

The OP is looking at it from the wrong end, there is no penalty, just a reward if you choose to pay quicker.

pseudodox

Cirrus1 said:

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. 

Same here.  I treat winter bills as the norm as we live in a country which is guaranteed on average to be cold October-March.  Then I enjoy the low bills April-September, which leaves me money for holidays & other summer treats.  I get the discounted price for paying by DD.  Regarding the oft repeated comments on the forum that the energy companies have to pay up front for their supplies I wonder how many people get their wages ahead of time worked?  When I was working I got paid at the end of the week or month for past work done, which I always saw as normal.  And if the energy companies have to retain customers money in ring fenced accounts then how can they use that money as working capital?

OP should move to whole bill direct debit - get the discounted rates & the assurance of the DD Guarantee backed by your bank.  BG, or whoever, have to then give you a monthly bill (accurate if you provide readings), & they have to give 14 working days notice of the payment they will take & the date it will be taken.

[Deleted User]

pseudodox said:

Cirrus1 said:

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. 

Same here.  I treat winter bills as the norm as we live in a country which is guaranteed on average to be cold October-March.  Then I enjoy the low bills April-September, which leaves me money for holidays & other summer treats.  I get the discounted price for paying by DD.  Regarding the oft repeated comments on the forum that the energy companies have to pay up front for their supplies I wonder how many people get their wages ahead of time worked?  When I was working I got paid at the end of the week or month for past work done, which I always saw as normal.  And if the energy companies have to retain customers money in ring fenced accounts then how can they use that money as working capital?

OP should move to whole bill direct debit - get the discounted rates & the assurance of the DD Guarantee backed by your bank.  BG, or whoever, have to then give you a monthly bill (accurate if you provide readings), & they have to give 14 working days notice of the payment they will take & the date it will be taken.

Suppliers do not have to hold consumer credits in ‘ring-fenced’ accounts. This was considered recently by Ofgem and rejected for two reasons: one, it would lead to increased borrowing by suppliers as they are required to pay for energy in advance of supply with increased energy costs as a result, and two, it would dissuade new suppliers from entering the market.

molerat

matt_drummer said:

I am old enough to remember meter readers and quarterly bills.

And, you can still have quarterly bills if you wish from some suppliers.

But the title of the thread relates to being penalised for going this way, well you are not really penalised. 

Quarterly bills and payments are the standard price, but if you want to pay a `fixed' monthly direct debit based based on your expected usage then you are rewarded with a discount.

The OP is looking at it from the wrong end, there is no penalty, just a reward if you choose to pay quicker.

And I am old enough to remember the gas man coming and taking all the 2/- pieces out of the meter, counting them up and leaving a load behind after working out the amount you had used.  I do everything the modern electronic way.

My younger SIL still won't use on line banking, will only use a cashpoint inside the bank branch but prefers getting cash over the counter, queues to pays her "rates" at the post office and has just recently started paying her electric by DD.

pseudodox

We are all paying increased energy costs partly to cover the customer credit balances of the firm's who went bust & had to be bailed out.  And dissuading new entrants to the market who don't have the capital to fund a business without borrowing money from customers who don't want to lend is perhaps questionable as to whether that is good or bad.