Shell Energy Advice

Pedz11

Hello everyone, so Shell Energy notified me that my DD will more than double which is unaffordable as well as laughable. When I spoke to them they wanted to refer me to a third party company to 'assess' my income which I declined to do as I do not feel comfortable with providing all my personal details to a company I've never heard of. 

I then informed them of my intention to cancel their DD (which I did) and pay what I can afford manually via their website every month.  I want to understand the consequences of doing this, although I'm not planning to miss any payments, the amount won't be close to what they have requested.  However, the payments will be 20% more than the original DD amount. 

I want to understand what actions they can take if I am still making regular payments, even though it is not close to what they have requested.

Thanks in advance.

pochase

Welcome to the forum.

By cancelling your direct debit your cost thas increased by 7 to 9% as you have lost your direct debit discount.

You are just mentioning that the new direct debit is unaffordable for you, but not if it is justified.

What was your old DD, and what are they are asking for now? What is your annual usage and what are your rates?

When you canceleld the direct debit they will have put you on payment on receipt of bill. So if you get your bill and don't pay what you owe you will build up a debt. At the same time you are refusing to work with them on an accessment of your financial situation.

Especially during the winter with higher usage your debt will build up much faster.

Most likely scenario is that they will switch you to prepaid meters, which means that you are not paying what you can afford, but you can only use what you can afford.

macman

Give us some annual kWh figures and before/after DD levels, without which no meaningful advice can be given. Also, what is the current balance on the account?
As above, cancelling the DD is not a good idea.

EssexHebridean

Your supplier has a duty  to ensure that the DD is "reasonable" - this means that it should be set as a level where - across a year - it will cover the amount that an accurate estimate of your use suggests you will need to pay.  Some suppliers work on the basis that they expect to see accounts enter the winter in a good level of credit, and come out of winter with a deficit, at which stage the lowered use means the credit starts building again. Others use a "calendar year" for this starting from the point when you join them. 

As Pochase says - by cancelling the DD you have already increased your costs unfortunately, it would be better to reinstate the DD but work through the process to ensure that it is indeed "reasonable". 

As above - your starting point here is your actual annual usage as that will inform what your annual cost will be. You will also need to factor in that costs will increase by around 20% in April, and that this past year we have had the benefit of the £400 EBSS payment, which will not be happening again next winter. 

You need to work through this urgently before you start to go into debt - which allowing that you will now be on "payment on receipt of bill" and we still have at least a couple of higher "winter period" bills to come, is likely to happen imminently if you didn't already have credit on the account. Otherwise you do run the risk of being told that they need to switch you over to a prepayment meter. 

rumpetroll

Shell also offer a variable direct debit which means the direct debit will be for the amount of your bill rather than a fixed monthly amount, I switched to this because they had a habit of upping my DD every few weeks and then I'd have to log in and reduce it again, I know what my annual usage is and Shell do seem to overestimate it for the DD.

This would be a much better option for you than just cancelling the DD and paying the bill every month as like others have siad, you will now be paying more because of this.

EssexHebridean

rumpetroll said:

Shell also offer a variable direct debit which means the direct debit will be for the amount of your bill rather than a fixed monthly amount, I switched to this because they had a habit of upping my DD every few weeks and then I'd have to log in and reduce it again, I know what my annual usage is and Shell do seem to overestimate it for the DD.

This would be a much better option for you than just cancelling the DD and paying the bill every month as like others have siad, you will now be paying more because of this.

BIB - ONLY if the monthly household budget allows - otherwise this will see the OP being unable to pay the winter bills at all. It's something that can work well for people to set up in Spring though, ensuring that they still budget effectively, and that the difference between the lighter spring, summer and early autumn bills is saved ready to be used to pay the higher winter ones. If someone is already struggling for cashflow, it would not be a good plan to set up this method of payment at this time of year. 

The OP still needs to do the sums around whether the amount they are currently looking to pay monthly will in fact cover their annual spend, IMO, as even if they did subsequently go to variable DD, it is those sums that will inform the amount they need to be setting aside on a monthly basis through the year. 

pochase

Going onto variable direct debit is better than the paying on receipt of a bill as you get the direct debit discount.

Problem would be if there is not enough money to pay the bill and the DD does not go through.

The problem with both - variable direct debit and pay on receipt of bill - is that if the OP is not able to pay the fixed direct debit set by the supplier, the amounts in the bill will be much higher than the fixed direct debit during the winter months.

This is under the assumption that the fixed DD was not set to high, but for the next 2 month it is very likely that the monthly bill is at the same level or more expensive than even an overestimated direct debit.

OP will need to come back witht he usage figures before we can give any further advise.

steviebabes

Shell are just a terrible company, I was forced to go with them when Green Energy folded. I stayed with them for about 5 months then switched to Octopus. After the final bill was paid I cancelled  the DD. I have since found out they affected my credit score with a missed payment strike. After a stroppy email and threatening to contact the energy ombudsman I received an apology and the strike was removed from my credit file. I would switch ASAP. 

Pedz11

Thank you all for your advice.  With the DD discount, I was not aware I was receiving one and looking at my last bill, I cannot see it showing anywhere.  Is this a universal benefit or does it depend on the supplier?  

Regarding affordability, even after cuts in other areas to help with the cost of living, in my view the level of payment they are asking for is ridiculously high.  Regardless, the rates they charge us cannot be controlled by the consumer, and from what I understand it is not worth switching to another supplier, so it is what it is.

Looking at my last bill, my predicted annual usage for electricity is 5,803 kWh and for Gas 11,123 kWh.  My DD was in the low 200's now they are asking for over £400 so over double. Currently my account is over £1000 in the red which should start levelling out over the spring/summer as somebody mentioned.

I cannot understand how they are making billions in profit and still, they are charging these abnormally high rates.  Surely if the increases are down to their costs, their profits would be modest right? 

Reading above, cancelling the DD was probably not the right move but, ultimately, I just want to be in control of my finances.  I only knew they planned to change my DD because I logged on to my account, I didn't receive any notifications on the subject.  

I will get back in touch with them and try and agree a way forward although to be quite honest, a pre-paid metre doesn't sound that bad to me as I'll have more control. I stand by not wanting to be reviewed by a third party though as I don't want to be sharing my personal information. 

Thanks again for your help and advice.

rumpetroll

EssexHebridean said:

rumpetroll said:

Shell also offer a variable direct debit which means the direct debit will be for the amount of your bill rather than a fixed monthly amount, I switched to this because they had a habit of upping my DD every few weeks and then I'd have to log in and reduce it again, I know what my annual usage is and Shell do seem to overestimate it for the DD.

This would be a much better option for you than just cancelling the DD and paying the bill every month as like others have siad, you will now be paying more because of this.

BIB - ONLY if the monthly household budget allows - otherwise this will see the OP being unable to pay the winter bills at all. It's something that can work well for people to set up in Spring though, ensuring that they still budget effectively, and that the difference between the lighter spring, summer and early autumn bills is saved ready to be used to pay the higher winter ones. If someone is already struggling for cashflow, it would not be a good plan to set up this method of payment at this time of year. 

The OP still needs to do the sums around whether the amount they are currently looking to pay monthly will in fact cover their annual spend, IMO, as even if they did subsequently go to variable DD, it is those sums that will inform the amount they need to be setting aside on a monthly basis through the year. 

Agreed, but my point was that if they have cancelled the DD and are just paying on receipt of the bill then they are basically doing this but with the added cost that is imposed by not being on DD. Certainly the best option if they are struggling to pay the bills is to work with Shell to get their fixed DD down to the correct level.

But blaming shell and burying their head in the sand because they can't afford the bills is not the answer.

Grandad2b

steviebabes said:

Shell are just a terrible company, I was forced to go with them when Green Energy folded. I stayed with them for about 5 months then switched to Octopus. After the final bill was paid I cancelled  the DD. I have since found out they affected my credit score with a missed payment strike. After a stroppy email and threatening to contact the energy ombudsman I received an apology and the strike was removed from my credit file. I would switch ASAP. 

This is similar to what happened to my mother - she was transferred to Shell with an accumulated debt of something like £2k (due to GE failing to bill correctly). Shell set her DD to recover the debt over a couple of years but then didn't reduce it to cover her actual consumption. Result: a year ago she went into residential care with a credit balance of £2k. She still owns the property but bills have fallen dramatically. Shell have still not refunded her credit balance and are still taking a monthly DD despite the massive balance.

Separately I was also transferred to Shell when Pure Planet dropped out of the market. I am now a few hundred in credit but have just transferred to another supplier. I wonder how long it will be before I get my credit balance back. If it's relatively quick I'll probably move my mother's account elsewhere too and then she can have the benefit of her money again.