Octopus direct debit guarantee.

bob2302

scottyp123 said:

At the moment my bills are about £70 per month for gas and electric but Octopus want me to pay £160 a month, that's crazy.

Then ask them to switch you to variable DD.

scottyp123

BarelySentientAI said:

scottyp123 said:

BarelySentientAI said:

double_dutchy said:.

Obviously if you have asked to pay by variable DD they should action that. If you use X then Octopus will normally respond to a complaint more quickly on there, otherwise I would email.

Why? They don't have to offer variable direct debit to any customer, it is entirely their discretion.

What's so special about energy bills that you have to pay more than you owe, it doesn't happen with anything else that you buy. At the moment my bills are about £70 per month for gas and electric but Octopus want me to pay £160 a month, that's crazy. In the olden days you got a bill after a quarter and then you toddled off to the electric or gas showroom and paid the bill by cash or cheque, you had in effect 3 month credit with them so you were mostly in debt to them. Nowadays they want your money up front.

I don't mind paying the same amount each month as long as it works in my favour though so to do this I always changed suppliers in the autumn when my gas usage starts to go up, doing it this way I was always in debt over the winter but it evened itself out over the summer months, just like it always used to be. 

I just don't get why my money needs to be in their bank and not mine before I owe it to them, it doesn't make any sense to me. If a situation arises that I deem more important than an electric bill I'll be able to get my hands on the money a lot easier if its in my bank than theirs.

Having said all that though I like the idea of a £1 a month DD and paying the rest off by card each month, that sounds perfect.

You don't see how those two points are a very good reason?  Why shouldn't they want the money up front if you're going to decide that something else is more important than paying the bill?

What other things are delivered to your house at the instant you want them, which you then pay for a month after you've used them at zero risk of paying any interest?  Somehow it does seem to be a special arrangement, no?

What a strange position you are taking - "I demand that the company offers me interest free credit that I might decide to pay back or might not, on whatever terms I demand it to be".

You owe it to them at the moment you use the electricity or gas.  And you owe them the standing charges every day.  Not three months (or even one month) later.  So your idea of "it should be in my bank until I owe it" means you should be paying a bill at least every day.  That's obviously a nonsense concept.

As for why they want you to pay so much, it's probably partly due to your "always change in the autumn so the first thing I do is go into debt" plan.  The regulator has decided that people being in debt for most of the year is a bad thing and has told suppliers to try and make sure this does not happen.  A £70 summer bill could easily be a £200 winter bill (or more), so they have been told to put you in enough credit that you don't go below 0 balance.

You don't like the DD arrangements, then don't pay by DD.  You are aware of the consequences.

To be blunt, some things are more important than electric or gas bills, say for e.g. its the middle of winter and when you turn up for your hotel you find its shut for the night due to an unavoidable delay, you have £100 in the bank but its for the gas bill the next day, surely you wouldn't sleep on bench in -10deg temperatures when there is a travelodge open next door that has warm rooms for £100. I would worry about the bill when I woke up. If I gave Octopus the money up front I might not wake up at all if I freeze to death, I doubt someone from Octopus would put me up for the night if I phoned them.

But back to bills, I don't even begrudge paying a month up front if money is so important to them but not months and months up front, I see posts on various forums where people are hundred and hundreds in credit or even more than a thousand and are asking how they get it back, these various energy companies would gladly take every single penny of yours without hesitation if you aren't on the ball.

double_dutchy

bob2302 said:

A variable DD is still a DD. Are you saying that Octopus charge more for variable DDs? 

No, I didn't say that. Some people prefer to pay by credit card (for cashback or some other benefit), so just pointing out how you can still get DD prices while (mainly) paying another way.

MattMattMattUK

scottyp123 said:

BarelySentientAI said:

double_dutchy said:.

Obviously if you have asked to pay by variable DD they should action that. If you use X then Octopus will normally respond to a complaint more quickly on there, otherwise I would email.

Why? They don't have to offer variable direct debit to any customer, it is entirely their discretion.

What's so special about energy bills that you have to pay more than you owe, it doesn't happen with anything else that you buy. At the moment my bills are about £70 per month for gas and electric but Octopus want me to pay £160 a month, that's crazy. In the olden days you got a bill after a quarter and then you toddled off to the electric or gas showroom and paid the bill by cash or cheque, you had in effect 3 month credit with them so you were mostly in debt to them. Nowadays they want your money up front.

If your bills are about £70 a month now then in all likelihood they could be £200+ pm level in winter, so Octopus are trying to balance out your monthly payments and as you have a small credit accumulated they need to get you there ahead of winter. They are required by Ofgem to stop you getting into debt, so they need to raise that monthly payment now. It is not "crazy". In the "olden days" bills were higher than they would have needed to be to cover the cost of the supplier financing the debt, hence why they are also now higher for those who pay via quarterly bills/on receipt of bill rather than via Direct Debit.

scottyp123 said:

I don't mind paying the same amount each month as long as it works in my favour though so to do this I always changed suppliers in the autumn when my gas usage starts to go up, doing it this way I was always in debt over the winter but it evened itself out over the summer months, just like it always used to be. 

Ofgem require that suppliers do not let consumers get into debt over winter, hence you needing to be charged to build up a credit ahead of winter.

scottyp123 said:

I just don't get why my money needs to be in their bank and not mine before I owe it to them, it doesn't make any sense to me. If a situation arises that I deem more important than an electric bill I'll be able to get my hands on the money a lot easier if its in my bank than theirs.

This is why they want the money, you are in effect saying you do not want to pay them if you find something better to spend the money on.

scottyp123 said:

BarelySentientAI said:

scottyp123 said:

BarelySentientAI said:

double_dutchy said:.

Obviously if you have asked to pay by variable DD they should action that. If you use X then Octopus will normally respond to a complaint more quickly on there, otherwise I would email.

Why? They don't have to offer variable direct debit to any customer, it is entirely their discretion.

What's so special about energy bills that you have to pay more than you owe, it doesn't happen with anything else that you buy. At the moment my bills are about £70 per month for gas and electric but Octopus want me to pay £160 a month, that's crazy. In the olden days you got a bill after a quarter and then you toddled off to the electric or gas showroom and paid the bill by cash or cheque, you had in effect 3 month credit with them so you were mostly in debt to them. Nowadays they want your money up front.

I don't mind paying the same amount each month as long as it works in my favour though so to do this I always changed suppliers in the autumn when my gas usage starts to go up, doing it this way I was always in debt over the winter but it evened itself out over the summer months, just like it always used to be. 

I just don't get why my money needs to be in their bank and not mine before I owe it to them, it doesn't make any sense to me. If a situation arises that I deem more important than an electric bill I'll be able to get my hands on the money a lot easier if its in my bank than theirs.

Having said all that though I like the idea of a £1 a month DD and paying the rest off by card each month, that sounds perfect.

You don't see how those two points are a very good reason?  Why shouldn't they want the money up front if you're going to decide that something else is more important than paying the bill?

What other things are delivered to your house at the instant you want them, which you then pay for a month after you've used them at zero risk of paying any interest?  Somehow it does seem to be a special arrangement, no?

What a strange position you are taking - "I demand that the company offers me interest free credit that I might decide to pay back or might not, on whatever terms I demand it to be".

You owe it to them at the moment you use the electricity or gas.  And you owe them the standing charges every day.  Not three months (or even one month) later.  So your idea of "it should be in my bank until I owe it" means you should be paying a bill at least every day.  That's obviously a nonsense concept.

As for why they want you to pay so much, it's probably partly due to your "always change in the autumn so the first thing I do is go into debt" plan.  The regulator has decided that people being in debt for most of the year is a bad thing and has told suppliers to try and make sure this does not happen.  A £70 summer bill could easily be a £200 winter bill (or more), so they have been told to put you in enough credit that you don't go below 0 balance.

You don't like the DD arrangements, then don't pay by DD.  You are aware of the consequences.

To be blunt, some things are more important than electric or gas bills, say for e.g. its the middle of winter and when you turn up for your hotel you find its shut for the night due to an unavoidable delay, you have £100 in the bank but its for the gas bill the next day, surely you wouldn't sleep on bench in -10deg temperatures when there is a travelodge open next door that has warm rooms for £100. I would worry about the bill when I woke up. If I gave Octopus the money up front I might not wake up at all if I freeze to death, I doubt someone from Octopus would put me up for the night if I phoned them.

I would not travel to a hotel with only £100 left in my account, I would not put myself in that position, if I cannot cover the basics (my energy bill) I would not be travelling and spending money I did not have.

scottyp123 said:

But back to bills, I don't even begrudge paying a month up front if money is so important to them but not months and months up front,

What kind of month, a summer month, a winter month? If you do not like budget/fixed Direct Debit the switch to variable, just be prepared for your payments in winter to be 2-4 times your payments in summer. For those who are good at budgeting it presents no issue, but many people also come unstuck as they do it in summer and love their low bills, but come back complaining of major issues when their £100 pm summer payment goes up to £400+ in a cold December. 

scottyp123 said:
I see posts on various forums where people are hundred and hundreds in credit or even more than a thousand and are asking how they get it back, these various energy companies would gladly take every single penny of yours without hesitation if you aren't on the ball.

No they would not, that is complete hyperbole. Those situations where people end up with large credits do happen, as do those with large debts. It is often because people have not submitted meter reads for a long time and so have been estimated, but have significantly cut back on their usage, or vice versa if in debt. They way they get their credit returned to them is to submit meter readings and then request a refund, some people have issues getting it back due to various admin issues, but the majority have it refunded with zero problems. The major reason that they have in getting a large credit back is the need to submit photos of the meter to prove the read is real when they have not submitted reads for many years. There are of course some occasions where the customer has done everything asked of them and the payment is still delayed and those should not happen, but unfortunately they do, but as AI says, if people kept on top of their bills the issue would not occur in the first place. 

HappyHarry

scottyp123 said:

I just don't get why they always want money up front in their account, if I buy a TV at £300 they dont say you need to give us £400 and we'll keep £100 until you need to buy something else but if you only want to give us £300 for the TV then the price is £350, no you just buy it and that is that.

Surely the shop are requesting £300 up front before you watch the tv?

Much in the way the energy company are requesting money up front before you use the energy.

In most situations, you would expect to pay for something before you used it - the TV example you have used is  a good one. (I think the extra £100 you are tacking into the £300 above is just being a little silly).

double_dutchy

BarelySentientAI said:

Why? They don't have to offer variable direct debit to any customer, it is entirely their discretion.

Yes, but the OP doesn't say that they turned down his request, only that they "ignored" it. In that case, if it was me, I would re-iterate my original request.

Octopus do say in their bill support blog that one option is to pay by variable direct debit, I'm not aware of any reasons why they wouldn't let you if you ask.

mjm3346

I was on a fixed DD with Octopus, joined them about Oct last year, around 4 months ago they wanted to increase payments considerably (£58 up to £79) to build up credit for the winter months - I declined their offer and opted for monthly actual bill payment by DD instead - something they sorted simply by me replying to their email.

MattMattMattUK

Octopus will let people switch to Variable Direct Debt, if one calls them they will do it on the phone, after a quick explanation that it results in higher bills in winter and lower bills in summer. When I did it, it took about three minutes.

BarelySentientAI

double_dutchy said:

BarelySentientAI said:

Why? They don't have to offer variable direct debit to any customer, it is entirely their discretion.

Yes, but the OP doesn't say that they turned down his request, only that they "ignored" it. In that case, if it was me, I would re-iterate my original request.

Octopus do say in their bill support blog that one option is to pay by variable direct debit, I'm not aware of any reasons why they wouldn't let you if you ask.

Outstanding debt, poor payment record, previously cancelled/refused/reversed direct debits...

But yes, Octopus do generally offer it.

TheBanker

scottyp123 said:

I just don't get why they always want money up front in their account, if I buy a TV at £300 they dont say you need to give us £400 and we'll keep £100 until you need to buy something else but if you only want to give us £300 for the TV then the price is £350, no you just buy it and that is that.

If you buy a £300 TV, you receive a £300 TV. You generally pay in advance (if ordering for delivery) or when you take ownership of the goods (if buying in a store). The key thing is, even if the retailer gives you credit and allows you to pay in installments over a few months, they know their maximum loss if you default is £300. And if you missed the payments on the TV, they would likely refuse to provide further goods on the same terms.

On the other hand, Octopus don't know how much energy you're planning to use. They have to estimate it based on your historical usage and other factors. And if you don't pay, they still have to supply more energy - they can't just cut you off. Even converting you to a pre-payment meter to recover your debts is not an easy process if the customer is not cooperative. 

So while the TV retailer has no real reason to take a higher payment than the cost of the TV, Octopus do. 

Even if you pay each month's bill in full by variable DD, they are still providing you with credit and still exposed to the risk of non-payment. These are risks that the TV retailer simply doesn't have to factor into their commercial decisions. If you want your energy bills to work in the same way as a transaction at Tesco, you probably need pre-payment meters rather than any kind of credit account.