Direct debits to energy companies seem to be some sort of scam

Chrysalis

dunstonh said:

I agree on the regional subsidy thing, e.g. on broadband we dont see villages being charged more by BT vs those in cities when villages are more expensive to provide broadband for.  It makes sense to equalise it. (this is coming from someone with a region on one of the cheaper SC's).

On the other hand, the vast majority of villages don't have full fibre and rely on third party companies to install it at a higher cost of the end user than if openreach did it.

So, whilst Openreach may not charge more, they don't install much in villages.  So, villagers are paying more.  

Latest data shows the % of rural areas with FTTP is similar to city areas, rural has been heavily subsidised, even to the point its becoming preferable for it to be rolled out there.  My city e.g. 3/4 of it has no FTTP provider.  but a lot more than 25% of the surrounding county area is getting openreach FTTP.

Spoonie_Turtle

Chrysalis said:

Spoonie_Turtle said:

Chrysalis said:

dunstonh said:

The govn needs to tell Ofgem to set one capped rate for the whole of England, averaged out from DD, prepayment and pay on receipt, rather than different rates for different parts of the country and different payment methods, would make comparing rates much easier and simpler, especially if the standing charge was rolled into the unit rate.

Currently, the costs of supply in a region are met by that region.  So, what you want is a greater cross subsidy from cheaper areas to more expensive ones.   

Rolling the standing charge into the unit rate is not at all fair.

I agree on the regional subsidy thing, e.g. on broadband we dont see villages being charged more by BT vs those in cities when villages are more expensive to provide broadband for.  It makes sense to equalise it. (this is coming from someone with a region on one of the cheaper SC's).

Do we not?  Quote from BT is £29.99/month for apparently 1-3Mbps (in reality, 2Mbps is the absolute maximum over the copper wires).  In a nearby town, £26.99 for fibre. 
Our fibre is c.£45/month, not with BT because another company installed it in the village.

We dont, what you posting is a comparison of a slow DSL service to a FTTP service, there is town areas with slow DSL as is also villages with FTTP, so your example isnt rural vs urban specific.

In fact rural areas have actually been getting significant government subsidies in the form of the gigabit vouchers and for VDSL the BDUK scheme.

Well if we're comparing FTTP then yes we're paying more than towns, it's just not possible to compare with the same provider here.  Though I recognise one specific comparison is of course not evidence of it being a nationwide, systemic pricing structure in the same way that energy has regional variations.

(And in case it wasn't clear, the clunky comparison was because those are our only two options, we can't shop around *at all*.  I sincerely doubt any towns have <2Mbps DSL any more so again, not possible to do an exact and specific comparison.  The fact remains we would be having to pay more for rubbish DSL than they would be paying for fibre.)

Chrysalis

Spoonie_Turtle said:

Chrysalis said:

Spoonie_Turtle said:

Chrysalis said:

dunstonh said:

The govn needs to tell Ofgem to set one capped rate for the whole of England, averaged out from DD, prepayment and pay on receipt, rather than different rates for different parts of the country and different payment methods, would make comparing rates much easier and simpler, especially if the standing charge was rolled into the unit rate.

Currently, the costs of supply in a region are met by that region.  So, what you want is a greater cross subsidy from cheaper areas to more expensive ones.   

Rolling the standing charge into the unit rate is not at all fair.

I agree on the regional subsidy thing, e.g. on broadband we dont see villages being charged more by BT vs those in cities when villages are more expensive to provide broadband for.  It makes sense to equalise it. (this is coming from someone with a region on one of the cheaper SC's).

Do we not?  Quote from BT is £29.99/month for apparently 1-3Mbps (in reality, 2Mbps is the absolute maximum over the copper wires).  In a nearby town, £26.99 for fibre. 
Our fibre is c.£45/month, not with BT because another company installed it in the village.

We dont, what you posting is a comparison of a slow DSL service to a FTTP service, there is town areas with slow DSL as is also villages with FTTP, so your example isnt rural vs urban specific.

In fact rural areas have actually been getting significant government subsidies in the form of the gigabit vouchers and for VDSL the BDUK scheme.

Well if we're comparing FTTP then yes we're paying more than towns, it's just not possible to compare with the same provider here.  Though I recognise one specific comparison is of course not evidence of it being a nationwide, systemic pricing structure in the same way that energy has regional variations.

(And in case it wasn't clear, the clunky comparison was because those are our only two options, we can't shop around *at all*.  I sincerely doubt any towns have <2Mbps DSL any more so again, not possible to do an exact and specific comparison.  The fact remains we would be having to pay more for rubbish DSL than they would be paying for fibre.)

My city has slow ADSL areas as the only fixed internet option.

Only a 1/4 of it is planned for Openreach FTTP, although most of it is planned for cityfibre.

My point being though that there is heavy subsidies in broadband for rural areas.  If you in a slow city area, there is no government schemes to bail you out, no gigabit vouchers, no BDUK.

If the broadband sector was ran like the energy sector, you would have no FTTP option at all in your village unless you was willing to pay 5 or 6 figures for FTTP on demand.

harryhart

Many thanks for all your comments.  I didn't know that I was paying a "normal price" and Direct Debits were a discount.  THe company in question is Octopus.  Unfortunately, they didn't mention this in their reply to my email or any other of my questions.  They just talked generally about how direct debits worked throughout the year, which I am well aware of.
In fact, I am now an old man, but when I was much younger   I had a much older friend who had previously worked as computer manager of South West Gas.  A rather brilliant "ideas man", he was not at all given to boasting, but he was rather proud of "inventing" direct debits, marketed as something to help customers equalise their payments over the year, but in fact a device to dramatically improve cash flow.   Prior to direct debits, the normal arrangement would be to bill customers three months in arrears, and some tight people (like me) would even have the cheek to wait for a final demand before making a payment.
Meanwhile, my own money for non-monthly bills (e.g. energy, phones, Christmas, holidays) was carefully stashed away in my interest-earning HSBC "Home Management Account".  Ah, The Good Old Days!

pseudodox

  

Meanwhile, my own money for non-monthly bills (e.g. energy, phones, Christmas, holidays) was carefully stashed away in my interest-earning HSBC "Home Management Account".  Ah, The Good Old Days!

Good Old Days?  But this is exactly what many of us still do.  I pay monthly Whole Bill DD so I benefit from the discount but my money meanwhile earns interest in MY savings account.  Along with money for other,  now monthly, bills like Council Tax, telephone, credit card, TV licence etc.  I pay water every 6 months in arrears, again for exactly what I have used. With interest rates now moving upwards every little helps.

TheElectricCow

pseudodox said:

  

Meanwhile, my own money for non-monthly bills (e.g. energy, phones, Christmas, holidays) was carefully stashed away in my interest-earning HSBC "Home Management Account".  Ah, The Good Old Days!

Good Old Days?  But this is exactly what many of us still do.  I pay monthly Whole Bill DD so I benefit from the discount but my money meanwhile earns interest in MY savings account.  Along with money for other,  now monthly, bills like Council Tax, telephone, credit card, TV licence etc.  I pay water every 6 months in arrears, again for exactly what I have used. With interest rates now moving upwards every little helps.

And for anyone who wants to squeeze a little extra bonus out on top of this it is possible to go a step further by setting a fixed minimal DD and paying the bill with a cashback credit card. Still gets the DD discount, the interest on keeping the money in your account, plus the added bonus of a little extra back each time a bill is paid.

A current account with cashback on bills could also work if that’s your thing, and would do away with the extra credit card hoops to jump through, although there would be a small loss in interest earning potential from the extended time period before needing to settle a CC bill. 

powerful_Rogue

Or if like me you pay by a fixed rate DD and then build up credit, do what I did last week and request a lump of it back and it was in my bank account 4 days later.

Really struggling to see what the scam is here.

Gerry1

powerful_Rogue said:

Really struggling to see what the scam is here.

Originally the DD scheme was that accounts were in credit for half the year and then in debit for the other half.  That was fair to everyone, it just smoothed out the peaks and troughs.

The scam is that dozy Ofgem allowed many 'front room' companies to inflate DDs so that accounts were always significantly in credit; effectively they were Ponzi schemes.

Around 30 smaller suppliers went bust after the energy crisis hit, not to mention Bulb that was too big to fail. Customers were bailed out via the SoLR scheme, and now we're all paying higher electricity standing charges as a result.

The big boys may not be Ponzi companies but they still like to use fixed DDs to amass a convenient source of funds that earn them interest at your expense.

matt_drummer

Gerry1 said:

The big boys may not be Ponzi companies but they still like to use fixed DDs to amass a convenient source of funds that earn them interest at your expense.

They also supply our energy at little to no profit, even a loss at times.

Nobody is being ripped off by energy retailers in the UK.

dunstonh

Really struggling to see what the scam is here.

There isn't one.   It's just that some people are lazy and expect the supplier to do all the work for them and then get angry when change of use or different weather conditions mean the estimates were wrong.