Backbilling

uponthehill

Hi, I'm experiencing problems with my energy supplier as my meter stopped working well over a year ago and despite notifying them they did nothing yo fix it and I have been paying estimated bills ever since. I got in touch with the ombudsman who made rhem replace it and resolve the billing. I was told by the ombudsman that I would be due a refund of some of the bills I had paid because it had gone on for longer than a year, however one the meter was replaced the energy supplier recalculated the bills and sent me a bill for quite a large sum, again estimated. This bill covers a period of more than a year, which I didn't think they could do based on backbilling rules. The ombudsman aren't answering my emails, and the energy supplier are putting pressure on to pay this bill. I don't believe this bill is correct, and I don't think I should have to pay it but I currently have no advice on where I stand. Any advice would be welcome. Thankyou.

BarelySentientAI

If you have an Ombudsman decision that says they shouldn't charge you, then that's really the end of it.

Is that what you have?

It sounds a lot more like you've been told the layperson's version of the back billing rules, which is substantially lacking and often incorrect.

uponthehill

@ BarelySentientAI The ombudsman told me in conversation that I would be getting a refund due to the amount of time this situation went on i.e. more than a year, but I don't have that in writing, and when the energy company completed their backbilling they sent me a bill for hundreds of pounds. I don't believe this bill is correct but I can't get any answers from the ombudsman.

BarelySentientAI

If you think the Ombudsman will support the situation, make a new complaint to the supplier and then (if they don't fix it as you expect) go back to the Ombudsman asking for the same fix.

One thing to remember though, is that the back billing rules say (amongst other things) they can't charge you for energy used more than twelve months ago if they have never tried to charge you for it before - slightly different from what many people think.

Qyburn

The other widely misunderstood aspect of backbilling is that even when it applies, the supplier can't ask you to make a payment for energy used more than 12 months ago, but they can hold on to money that you've already paid them.

uponthehill

@Qyburn, OK, so the bill that they have sent me starts from spring '23 - so I can refuse to pay for the part of the bill that is more than a year ago?

BarelySentientAI

uponthehill said:

@Qyburn, OK, so the bill that they have sent me starts from spring '23 - so I can refuse to pay for the part of the bill that is more than a year ago?

Had they ever billed you for that usage before?

Were you in credit at the time of that usage?

If the answer to either of those questions is "yes" then they can charge for it.

Incidentally, you can't "refuse to pay" (if you value your credit file anyway), but you can complain and get the bill changed if they have got it wrong.

Ectophile

If anyone wants to read the actual Backbilling rules, not the (often smug) opinions of anyone on this forum, here they are.

Electricity: https://www.ofgem.gov.uk/sites/default/files/2023-03/Electricity%20Supply%20Standard%20Consolidated%20Licence%20Conditions%20-%20Current.pdf 

Gas: https://www.ofgem.gov.uk/sites/default/files/2024-07/Gas_Supply_Standard_Consolidated_Licence_Conditions_July_2024.pdf 

In both cases, scroll down to section 21BA Backbilling.  They are pretty much the same.

BarelySentientAI

If you'd like to call someone out, then just do it.

I've certainly posted those links and screenshots of section 21BA before on this forum, and it can be paraphrased as I suggested.

21BA.2  Paragraph 21BA.1 [backbilling - my insert] does not apply in the following circumstances:
(a) where any charge recovery action was taken prior to the date this condition took effect
(b) the licensee or any Representative, has taken a charge recovery action following the date this condition took effect in a manner which complied with paragraph 21BA.1 ...

Both issuing a bill (even using estimated readings, the use of which complies with 21BA.1) and taking a direct debit payment are charge recovery actions.  Issuing a bill is even specifically described as a charge recovery action in paragraph 21BA.1.  This has been supported by several Ombudsman decisions.

Qyburn

I don't know where Ectophile thought he was putting people right. It may be his interpretation of "seeks to recover", whether that applies only to asking for a new payment, or whether it also applies to assigning a balance already held. I doubt if there's case law, but there may be Ombudsman decisions turning on that point.

I've also seen a more extreme view expressed, asserting that the supplier can reverse allocation to a recent bill and assign the resulting credit to an older bill for use more than 12 months ago. 

BarelySentientAI

Qyburn said:

I don't know where Ectophile thought he was putting people right. It may be his interpretation of "seeks to recover", whether that applies only to asking for a new payment, or whether it also applies to assigning a balance already held. I doubt if there's case law, but there may be Ombudsman decisions turning on that point.

I've also seen a more extreme view expressed, asserting that the supplier can reverse allocation to a recent bill and assign the resulting credit to an older bill for use more than 12 months ago. 

The use of credit balance and how it applies is very poorly documented, and explanations of decisions vary quite substantially.

One description I've seen is along the lines of "if the new bill would leave you in credit, then back billing does not apply" - which would seem to match the intent of preventing bill shock, but I can't match that with any particular wording in the legislation.

There's an interesting open letter from OFGEM where they annotate and comment on 21BA which explains how they intend and expect the conditions to be applied.  Interesting extracts:

"The backbilling limit applies when a supplier is seeking the recovery of previously unbilled consumption" - the paraphrased 'if they have already billed you, then back billing doesn't apply'.

"SLC 21BA.1 is intended to protect consumers who have built up a debt without their knowledge due to inaccurate billing." - the intent of protecting against building up a debt rather than an attempt at blanket prohibition against old charges.

"suppliers are not precluded from issuing further bills to demand payment from consumers in circumstances where they have already properly issued bills for energy consumed or charges incurred in a manner that is compliant with the 12-month backbilling limit. In that case, they may issue further bills in respect of the same units of gas/electricity or standing charge amounts beyond the 12-month limit." - confirms that as long as there was an issued bill within the twelve months, all future bills for the same units or SC amounts continue to be valid.

Of course, OFGEM intent is not the legislation and nobody is directly bound by it, but it is useful to know.
https://www.ofgem.gov.uk/sites/default/files/docs/2020/12/open_letter_on_expectations_for_energy_suppliers_undertaking_charge_recovery_action_0.pdf