Back Billing - Disagreement with the Ombudsman

Quantum912

Hello all,

Firstly, the history of the problem.

I signed up with an electricity supplier in September 2021 for a 2-year fixed tariff, set up my direct debit and all seemed to be going smoothly. I don't/won't have a smart meter and I gave them regular monthly readings on time.

In February 2022 I checked their app on my phone and noticed a large credit balance had built up in my account. On checking further I realised the supplier wasn't charging me for the energy but just the daily standing charge. I contacted them and they assured me the problem would be corrected. It wasn't.

In June 2022 I noticed the large credit balance in my account had disappeared and had been replaced by a debit balance of several hundred pounds. On further investigation I noticed the supplier had changed my tariff to a more expensive one and backdated it to the inception of my account the previous September. This incorrect tariff included the energy used, not just the standing charge. I contacted the supplier and complained. They removed the incorrect tariff and reinstated the previous credit balance, but didn't correct the billing for the energy I had told them about in the February. A few weeks later I realised the same problem had reoccurred so I again contacted them and again they corrected it and told me it wouldn't happen again. Still they didn't correct the original billing problem.

This situation continued with the billing only for the standing charge until the incorrect tariff was yet again applied in January this year. At this point my account had been about £1200 in credit but suddenly went to £600 debit. I contacted the supplier again and warned them if it happened again I would complain to the Ombudsman. Again they apologised, corrected the tariff and said they would investigate the issue and assured me it wouldn't happen again. Lo and behold, a few weeks later the incorrect tariff was applied again wiping out my credit balance and putting my account about £600 in debit. This triggered my complaint to the Ombudsman in March this year.


The problem:

The Ombudsman found in my favour and I was awarded a total of £100 compensation for my grief, wasted time etc. I also received an apology and a corrected and consolidated 20-odd page bill in May this year applying my originally contracted tariff all the way back to September 2021 some 20 months earlier.

I raised the issue of back billing with the Ombudsman after reading all the relevant documents on the web including the Standard Licensing Conditions (Latest consolidated version to June this year) to which energy suppliers are bound. Condition SLC21BA specifically covers back billing.

As the first correct bill I received was in May this year, my argument is that I cannot be billed beyond May last year as I was not provided with an accurate bill prior to May this year. SLC21BA lays down specific requirements for when the back billing rule can be applied or disregarded and this is irrespective of whether the account is in credit or debit balance. The Ombudsman does not agree despite lengthy "discussions" and me quoting the Regulations. They insist the back billing rule does not apply because my account was in credit after the correct bill was issued.

I understand all the alleged "Bill shock" intentions etc. but nowhere in the Standard Licensing Conditions is this specified, it is just shown as "intentions" or "reasons" in the various supporting blurb published by the Ombudsman etc. but not within the legislation itself. I am also aware that just because the energy company has my it money doesn't mean they are entitled to it. As I understand it and it has been amplified in other posts on this website, money paid by Direct Debits is paid essentially into a "holding account" with the supplier until called forward to pay a specific bill. This has been confirmed by individuals who have successfully received money back from energy suppliers as ordered by the Ombudsman when the back billing rule has been applied, despite their account being in credit.

Again, reading some posts on this forum it seems almost like it depends who at the Ombudsman takes on your case as to what they decide and it's down to pure luck. My case has been reviewed by another individual within the Ombudsman service, but of course they concur with their colleague. I don't feel their service is consistent and fair and am at a loss where to go from here.

If anyone has any experiences similar to mine where they have successfully received a refund after the back billing rule has been applied despite their account being in credit, could they please recount their experience here. I can then hopefully use this information to support and win my case.

Many thanks.

QrizB

Sorry, I think the Ombudsman has got it right.

Gerry1

Unfortunately the ombudsman does seem to rule consistently on this issue.  Another good reason for having Variable Monthly DD !

Was it BG by any chance?

Mobtr

The ombudsman is correct. Once the account is billed correctly, if the account is in credit the backbilling rules do not apply. If you hadn’t paid anything & there was a debit, then it would. 

Personally, although I know why it’s done,  I don’t agree with it as you’re essentially being penalised for making payments. If you’d paid nothing, you would have had a chunk taken off. 

Quantum912

Thanks all so far for your comments, but my counter to this is the following from SLC 21BA:

Quote:

"21BA.1 Subject to paragraph 21BA.2, where the licensee or any Representative Issues a Bill to a Domestic Customer or otherwise seeks to recover (including via a Prepayment Meter) Charges for the Supply of Electricity from that customer (hereafter a “charge recovery action”), they must only do so in respect of:

(a) units of electricity which could reasonably be considered to have been consumed within the 12 months preceding the date the charge recovery action was taken;

and

(b) where applicable, amounts in respect of a Standing Charge or any other type of supply charge accrued within the 12 months preceding the date the charge recovery action was taken."

End quote.

The text I've highlighted in bold to my understanding means that any method of payment be it by Direct Debit, quarterly billing in arrears, lump-sum payment in advance etc is subject to the same treatment, i.e. no differentiation may be made just because you are in credit, debit or otherwise.
If you can enlighten me otherwise, please explain and support your response with relevant information.

As I said in my original post, there are cases where customers HAVE been refunded even though they have credit in their accounts and the back billing has been applied. At least, this shows an inconsistency in the response from the Ombudsman if nothing else.

Many thanks.

PS. Gerry1 - No it wasn't BG.

Gerry1

It probably arises from legislation that was badly drafted or too limited in its scope.  Presumably the interpretation (if not the intention) is that there is no 'recovery' involved because the supplier has already collected the money and is only reallocating it internally.

I don't agree with the way it's working because it treats customers who pay their way less fairly than those who don't.

The legislation should have focused on encouraging suppliers to bill correctly and in a timely manner.  Sadly, unless and until the legislation is amended to achieve this there's probably little you can do.

powergen_insider

The "charge recovery action" was taken in July 2022 according to your initial timeline.  This means that by applying the 12 month limit, they can charge for everything which could "reasonably be considered to be consumed" since July 2021.  As you are querying charging for usage since September 2021, the Ombudsman is correct.

A later updated or corrected bill doesn't change the date of the charge recovery action.

powergen_insider

powergen_insider said:

The "charge recovery action" was taken in July 2022 according to your initial timeline.  This means that by applying the 12 month limit, they can charge for everything which could "reasonably be considered to be consumed" since July 2021.  As you are querying charging for usage since September 2021, the Ombudsman is correct.

A later updated or corrected bill doesn't change the date of the charge recovery action.

Sorry, that should say June 2021 and June 2022.

The debit/credit balance at the time of the bill is a bit of a red herring.

Mobtr

Quantum912 said:

Thanks all so far for your comments, but my counter to this is the following from SLC 21BA:

Quote:

"21BA.1 Subject to paragraph 21BA.2, where the licensee or any Representative Issues a Bill to a Domestic Customer or otherwise seeks to recover (including via a Prepayment Meter) Charges for the Supply of Electricity from that customer (hereafter a “charge recovery action”), they must only do so in respect of:

(a) units of electricity which could reasonably be considered to have been consumed within the 12 months preceding the date the charge recovery action was taken;

and

(b) where applicable, amounts in respect of a Standing Charge or any other type of supply charge accrued within the 12 months preceding the date the charge recovery action was taken."

End quote.

The text I've highlighted in bold to my understanding means that any method of payment be it by Direct Debit, quarterly billing in arrears, lump-sum payment in advance etc is subject to the same treatment, i.e. no differentiation may be made just because you are in credit, debit or otherwise.
If you can enlighten me otherwise, please explain and support your response with relevant information.

As I said in my original post, there are cases where customers HAVE been refunded even though they have credit in their accounts and the back billing has been applied. At least, this shows an inconsistency in the response from the Ombudsman if nothing else.

Many thanks.

PS. Gerry1 - No it wasn't BG.

They are not trying to recover charges. They would only be doing that if you were in debt. Being in credit means there are no charges to recover. 

The back billing rules are not that they can’t charge you for any usage prior to 12 months, just ADDITIONAL charges that you haven’t already paid for. 

If they had you on a low tariff in error & they then rebilled you on a higher one then if there were addition costs which put you in debt, they would be written off prior to 12 months but as the tariff is  lower and your direct debit covers it, there are no additional charges
Hope this makes sense 

HBomb78

Jumping on this thread as it's the closest to my own situation that I've managed to find... the EO have given my case a 'Final decision' after the supplier challenged and have stated that under SLC21BA means that they should write off my 'usage' (regardless of the fact it's real) because the supplier has taken so long to remedy my original complaint (just turned 3 years and still not resolved). Obviously the supplier is sticking to the BB rules of shock billing and refusing to credit my account as I was in credit. 
Jan this year, I had a very long conversation with the investigating officer at EO who told me point blank, the company is at fault for not resolving the issue in as timely manner and therefore cannot charge you for usage older than 12 months of an accurate/actual bill being raised. They still haven't managed to do this as they haven't applied my actual readings on the account and keep shifting the estimate readings back to Sept 22. Great I thought, that clears the amount I now owe - so I've not paid them.
I've now had my credit score hit hard for non payment, even though I still have a complaint with the supplier and EO open. My score has been hit so hard, my bank has reduced my credit card limit by over 70%. I can't switch suppliers because they've still not resolved the faulty meters and I'm paying over the odds on a SV rate. The EO have stopped responding to m emails chasing for an update, the phone call where this was all verbally explained, has been deleted even though their data retention policy states they hold them for 12 months (it was 5.5 months after the call I asked for the transcript) and I don't now what to do. This is seriously impacting my life now.... Please, any advice is welcome!! 

QrizB

Your credit score is a made-up number and is unimportant.

Cancelling your DD and stopping paying your bills however will be seen by your lenders as early signs that you are in financial difficulties and they will reduce their exposure, which is what they've done.

Who is your energy supplier, you've not named them?