Shell Energy - Final bill overcharge warning

FollowerOfMartin

I left Shell Energy on 16th November 2023.  At the time I was on the Flexible 12 Direct Debit tariff and had been since 1st October 2023.  The Shell Flexible ** tariff is their price capped tariff.

My billing day was the 10th of the month and all bills covering the period 1st October to 10th November 2023 used the Flexible 12 Direct Debit tariff.

My final bill however retrospectively applied the higher Flexible 11 Direct Debit tariff from the whole period of 1st October to 16th November 2023.  Hence Shell had used a tariff that was above the price capped rate for this period on my final bill.  I have calculated that I have been overcharged by over 49% on my final bill.

When I contacted Shell customer service they claimed that the terms and conditions include a clause that state that if a customer leaves within 60 days of a tariff change Shell retrospectively apply the previous tariff to the whole period since the tariff change.  I can find no such term. If anyone else reading this knows where this is specified then please reply.

Despite customer service assuring me on the phone that they would calculate an adjustment to my bill using the flexible 12 tariff they failed to do so in their email reply.  They just sent me a copy of the final bill and refused to do any adjustment.

If like me you believe that a flexible tariff should not be retrospectively changed in this way please check any final bill from Shell.  Good luck getting them to adjust it in your favour.

If anyone else has had a similar experience I’d be interested to hear your experiences.  Including how you managed to get Shell Energy to give you any refund due.

How can Shell charge a rate higher than the applicable price cap on a final bill?  I thought the whole point of the price cap was that domestic customers should not pay higher rates than the price cap.

Netexporter

The clue is in the word "flexible". The price is reset by Ofgem every quarter. The price went up on October 1st.

EssexHebridean

Hello OP - can you confirm which energy region you are in, and what the unit price and standing charge you have been charged by Shell, and we will be able to clarify for you whether that was the correct pricing for 1st October onwards. 

sproggi

I am having the same argument with them, so far they have tried -

telling me that I was on the wrong tariff,

then they asked for a screenshot of an email that I received mid September that showed that they had been billing me correctly (luckily I had kept it),

then they tried to tell me that they had only billed me incorrectly for 6 days in September, no they had not

The latest is the 60 days change of supplier and again, I have shown them that this is wrong, the email that I received states this only applies within 20 days.

I have now been passed on to the 6th person who is going to consult with management!

QrizB

FollowerOfMartin said:

How can Shell charge a rate higher than the applicable price cap on a final bill?

If you want any help, you're going to have to tell us what rates you were charged and what payment method you used (DD, prepayment etc).

Without this information it's impossible to say whether you have a valid complaint.

sproggi

FollowerOfMartin said:

When I contacted Shell customer service they claimed that the terms and conditions include a clause that state that if a customer leaves within 60 days of a tariff change Shell retrospectively apply the previous tariff to the whole period since the tariff change.  I can find no such term. If anyone else reading this knows where this is specified then please reply.

The relevant section was in the notification of the change of tariff from 1st October, you would have received the email mid September time.
I have just had this argument with them as the email clearly states it only applies if you change supplier within 20 days, not the 60 days that they are telling everyone. They have now recalculate my bill and are crediting me the difference. 

FollowerOfMartin

Thank you sproggi for highlighting the relevant section in the price change email.  I did receive a price change email on 12th September, but did not see the 20 working day rule until you pointed it out.  I hope I get the same outcome you did and receive the difference credited to my bank account.  No adjustment has been credited to my Shell Energy account yet so I guess that has to happen first. 

Twenty working days does still seem excessive to me.  Once a new lower capped price has been applied to a customer’s bill I do not think a supplier should be allowed to then retrospectively apply a higher tariff to previously billed kWh. 

Beyond this my understanding of the price cap is that no domestic customer should pay more than the price cap.  When it was originally introduced I thought it was to partially protect consumers who were on the highest variable tariffs at the time.  This of course was when there was still a functional consumer energy market with many tariffs less than the high variable rates most of are stuck on now.

Thus if energy suppliers were not allowed to charge more than a price capped rate in a period then any change of supplier would have to account for this.  Granted a customer moving on the 2nd October would see a less material impact on their final bill.  It’s more about applying the principal of how the price cap is in theory to protect the consumer.  However, OFGEM seems to exist more to protect suppliers than consumers and so it’s not that surprising that Shell are getting away with ripping customers off in this way.

I have contacted the Shell complaints department and will use the section of the email you highlighted to hopefully ensure they issue me with a refund.  I will also challenge them on how they exceeded the 1st October to 31st December 2023 price cap on my final bill.  As I said I do not believe they should be allowed to do this.  Thus they should be ordered to credit any customers that they have done this to.  At least those that left after 20 working days, but beyond that if the price cap is really to protect the consumer.  I’m not sure if the Energy Ombudsmen has the power to investigate Shell in this way, or even if OFGEM would have that power.  I think it’s highly likely that it’s not just you and me that Shell have overcharged on their final bill. 

If you’ve read down this far my apologies for the rant, but just to say thanks again sproggi for giving me the benefit of your experience.

FollowerOfMartin

EssexHebridean said:

Hello OP - can you confirm which energy region you are in, and what the unit price and standing charge you have been charged by Shell, and we will be able to clarify for you whether that was the correct pricing for 1st October onwards. 

Thank you for your offer of help.

I'm in region A, Eastern England.  My final bill applied the Flexible 11 Direct Debit tariff to the whole period from 1st October to 16th November. This was the higher pre-October 1st price capped tariff.  The Flexible 11 rates including VAT for gas were: Standing charge 29.11p per day; and 7.398p per kWh.  The Flexible 11 rates including VAT for electricity were: Standing charge 43.65p per day; and 30.720p per kWh.  As suggested by the tariff name I was paying by direct debit.  

kamkop

I'm in the same situation. Shell claims:

When switch is initiated on or around a price cap within 60days - we hold the right as under Supplier Licence Condition 23.6 and 24.9 to keep you on your old tariff which was flexible 11 since you decided not to remain a customer for flexible 12 tariff to be applied.

I checked 23.6 (section Circumstances where increases to Charges for the Supply of Electricity or Disadvantageous Unilateral Variations are ineffective or unenforceable) and 24.9 (section Continuation of Fixed Term Supply Contract terms for interim period) and none is applicable. Additionally, nowhere you can find mention of the '60 day' window.

I have highlighted this as well as details from the email Shell sent on 11th September about Flexible 12 tariff. Waiting now for their reply and hopefully recalculation of the final bill.

Saver1456

I too am in the same situation of being overcharged on the final bill and have discussed this with the complaints team, who agree the bill is incorrect and have made the appropriate credit to correct it.  Their reliance of the licence conditions argument is nonsense as those conditions are only relevant in the case of INCREASING prices.  

However it does concern me that all final bills issued since 1st October are higher than they should be and it would seem that Shell Energy are relying on customers to complain, rather than being proactive and contacting all customers who are affected.  I think this is well wrong and have told them so and hope they put that right.

To FollowerofMartin … I don’t quite understand how you have been overcharged by 49% as the price difference between Flexible 11 and Flexible 12, at least on electric was around 8%. Maybe check calcs?

To anyone calling Shell Energy for the first time on this subject…don’t let them fob you off!

FollowerOfMartin

Saver1456 thank you for taking the time to join the MSE forum and for adding your insights in your first post.

I’ve rechecked my figures and I think I’m correct.  I think the high percentage on the overcharging is due to the 6 days of my final billing period against the 47 days Shell overcharged me for.  For the purposes of illustration I’ll use a very simplified example.  Assume only 1kWh is used per day at a correctly price capped cost of £1 per kWh.  Thus the correct total due for the 47 days is £47, and £6 for the final billing period. 

However, if Shell increase the price to £1.08 per kWh, i.e. the 8% increase you calculated for electricity, then the amount incorrectly billed would be £50.76 for the 47 days.  If you take the difference, £3.76, and divide it by the correct amount for the final 6 days, £6, the percentage is 62.67%.  So I think 49% is in the right ball park.  Moreover, the percentage overcharge for customers with even shorter final billing periods could be higher.

I like you am appalled that Shell are getting away with overcharging customers in this way.  Only very reluctantly paying back any overcharged amounts after a customer has taken considerable time and effort to get their repayment.  I am still waiting for Shell to agree to repay me the amount they overcharged me.

I do believe that Shell should be forced by OFGEM, or whoever has the authority, to automatically repay any overcharged amounts to customers in our situation.  In this I include any customers that left within the arbitrary 20 working day window in their price increase email.  I am intending to challenge every justification that Shell may offer for what I consider to be a very dodgy business practice.  From what I understand this would mean escalating a complaint to the Energy Ombudsman.  My motivation being a sense of disgust that Shell are getting away with overcharging customers in this way. 

Any advice anyone can give in how best to try and achieve the aim of forcing Shell to repay any overcharges would be much appreciated.  Despite having a few dodgy energy suppliers in the past that made repayment of large credit balances difficult I’ve never attempted anything this ambitious before. 

A press release on the OFGEM website from March 2021 makes me believe it can happen.  This relates to failure of suppliers to correctly protect tariff prices when customers switched supplier.  The press released is titled, “18 energy suppliers pay £10.4 million for contract renewal failures”.  I don’t know what process lead to this outcome.  Looking at the line in the press release for Shell the OFGEM finding affected 225,823 customers to the tune of a £1,001,203.40 detriment.

If anyone can point me in the direction of where to find the Supplier Licence Conditions that Shell seem to be presenting as justification for their dodgy practices I’d appreciate it.  All I’ve managed to find so far is guidance on how the license conditions should be applied.

Good luck to anyone else stuck arguing with Shell for their refund, and I’m still hopeful that I will get mine.