E.On say my DD needs to change to help me stay free from debt

Scot_39

bob2302 said:

EssexHebridean said:

I suspect Scot was meaning by comparison with pre-pay?

I'm pretty sure he wasn't.

I'm pretty sure was.  But linked the last 2 paras and a slight edit  to make clearer

modelboater

MattMattMattUK said:

The difficulty for suppliers is that they have to follows guidance which says that the customer should not get into debt at any point in the year, hence the need to build up a credit, but also that the credit should not be "excessive", but with no definition of what that is. Some customers choose to get annoyed when they see a credit building up over summer, demand it is repaid, which the supplier does, then choose to become irate when their Direct Debit goes up to account for higher winter usage and the requirement to keep the customer out of debt. 

I have been with Octopus for a number of years.  In October 2023 I had a balance of £230 at the start of a new Fixed Contract (V5) with 12 "Fixed" monthly payments of £231. In July 2024 the "Fixed" payments were suddenly increased to £251, I thought my usage had increased and so took no action.

 At the end of the Contract my surplus balance was £320 and in an email Octopus offered me a V12 Fixed for £210 per month. Since I was a long standing customer, Octopus precicely knew  my annual usages etc. when they issued the new offer, they also knew how they manage the account balances over the coming year.  I accepted the offer five days before the new contract came into being. 

 

The day after agreeing to the V12 contract I received an email from Octopus regarding the necessary variation to the Direct Debit. 

Despite my account already being £320 in credit and nothing at all changing, the new monthly payment was to be  fixed 28% higher at £270 in order to create a £700 surplus at the end of the contract. 

Not a single item regarding my account had changed - the £210 per month V12 offer was simply clickbait, designed to entice comparison sites and renewals and only later, once you have committed to the fictional  monthly payments do they pull the actual payments they require out of the hat.

I cancelled the new Contract and moved elsewhere, hoping that this kind of behaviour is confined to Octopus.

Gerry1

Welcome to the forum.

Why didn't you ask Octopus for Monthly Variable Direct Debit?  Smaller bills in summer, higher in winter but at least you're always in control.

EssexHebridean

Modelboater, I appreciate that this is your experience, but nowhere do you tell us what the unit rates and standing charges were at each stage. without that information it is impossible for anyone - you included - to ascertain whether Octopus were being reasonable, or not. 

Hopefully when you moved elsewhere, you did compare the unit rates and standing charges on offer, and not just the DD they were suggesting as a starting point. 

GRMat158

Reed_Richards said:

In a normal annual cycle, your account will be in credit at the end of the summer and in debit at the end of the winter.  Eon can make a few pennies in interest whilst your account is in credit and you can make a few pennies of interest whilst your account is in debit.  Swings and roundabouts, surely?  

I have had this conversation with Eon today.  My stance is pretty much as stated above - "credit at the end of the summer and in debit at the end of the winter" - but that is seemingly not what Eon want.

At least on their website they now show a clearer calculation of the DD required which includes a "balance adjustment" component designed to build up credit.  This means that, in effect, over the next year they intend to take 14 months' worth of payments - effectively getting a two month deposit on your account which will remain there as long as you are a customer.

Fortunately, as I have a healthy credit balance at present the request increase to my DD was less than 10% so I was able to amend it myself on the website - but I suspect this will happen again, and again, and again....

This is also a bit of a double whammy since the "expected usage" which they use seems to be calculated as something more than your actual usage in the previous year.  May or may not be the case, but I don't think it is a "fair" way to do it.  I am fortunate that the differences I am talking about here will not cause me any financial hardship - but for those that are struggling these two policies are surely not right.

Variable DD is an option - but for me the fact that the DD will remain the same throughout the year (depending on Price Cap decisions!) is a definite plus.