How can continually overpaying be cheaper? A shocking £3000 in credit.

TooOrangeyForCrows

  

So I've recently been helping my dad out with his financial affairs, bills etc. and just found out he has been paying a ridiculously high direct debit amount to his energy company (OVO - gas & electric) for a number of years now.

Currently the account states that he is over £3000 in credit, yet the energy company continue to take more and more money out (the current monthly amount is close to £270 a month and just went out of the account again 2 days ago).

Needless to say I need to put a stop to this pronto. So firstly what's the best way to go about this?
(I've just taken the gas and electric readings via camera phone).

Secondly. I guess this was sold as a 'paying a monthly amount by DD is cheaper' kind of scam when first sold to my dad.
But how can giving free money away for someone else to invest be cheaper? I know this has built up every month - but with interest rates being upwards of 5% for a lot of the time in recent times my dad could easily have made £120+ on investing that money over the last year. 
Does anyone have any advice or suggestions on changing this tariff or even changing energy companies.

Thanking you all in advance.

Ayr_Rage

Unit rates when paying by monthly DD are cheaper than paying on receipt of the bill.

You need to check that all billing has been based on ACTUAL readings rather than estimates and if not, provide readings NOW and get an updated bill.

Only then can you find out the true position on the account.

Once you've done that then you can see whether a better tariff is available, especially if he is on the Standard Variable tariff.

Get the account facts straight first and then think about changes.

Mark_d

Paying monthly by DD is cheaper and not a scam. I don't know when/why your dad's DD went up to £270 but it should have been reviewed and revised downwards when he had built up a large amount of credit.
Is he really £3000 in credit or have OVO not debited the account - perhaps due to lack of actual meter reads being provided?
A few years ago OVO used to pay 3% on credit balances and this was a good interest rate at the time.  I know people who deliberately overpaid their electricity - both to avail of this high interest but also to hide money from DWP as it would affect the person's benefits.
Changing to a better tariff/supplier is easy.  Just go on to Uswitch if you're looking for the cheapest deal. Or maybe go to Octopus if you want a competitive deal and great customer service.

debitcardmayhem

First you need to send the readings. Next check the bills to see if he has been billed on actual readings or estimates. Then ask for a credit , so don’t cancel the DD, they will pay the credit to that account. Then ask to adjust the DD. 
Whilst doing that see if there are better deals than what he is on now, then switch. If you need help sorting out the bills  post on here.

km1500

You could also consider switching to someone like octopus where you have the option to be billed each month for the actual usage

Obviously this means your bills will be lower in the summer and higher in the winter so you need to decide if this is appropriate for your dad

However no credits or debits build up if you use this method.

Once you have sorted out if your dad's meter readings match the bills then you can ask for the 3000 credit to be paid back to his bank account - well at least most of it

TooOrangeyForCrows

According to the account the last readings were taken/given in November 2024 (so not that many months ago) though I presume they are still being estimated in some way.

Seems very suspicious to me to have vulnerable people just continue to pay and pay pay way above the level of what they are actually using.
Then when we dig down into the weeds: 'cheaper' can mean just pennies cheaper
The free money given to the energy company for them to invest elsewhere would have yielded £120-150 within the last 12 months had my dad been able to invest it himself.
Thus 'cheaper by DD' takes on an even more suspicious and scammy edge . . 

Furthermore my dad received a letter just today with the big and bolded text being "A debt could be building up on your energy account'. Which again looks like pure scaremongering scam talk.

TooOrangeyForCrows

Mark_d said:

Paying monthly by DD is cheaper and not a scam. I don't know when/why your dad's DD went up to £270 but it should have been reviewed and revised downwards when he had built up a large amount of credit.
Is he really £3000 in credit or have OVO not debited the account - perhaps due to lack of actual meter reads being provided?
A few years ago OVO used to pay 3% on credit balances and this was a good interest rate at the time.  I know people who deliberately overpaid their electricity - both to avail of this high interest but also to hide money from DWP as it would affect the person's benefits.
Changing to a better tariff/supplier is easy.  Just go on to Uswitch if you're looking for the cheapest deal. Or maybe go to Octopus if you want a competitive deal and great customer service.

Should have been but hasn't . . . of course because the company is making even more scandalous profit by employing "cudda shudda wudda" instead of actually doing what they should . . and the aforementioned big text bolding letter received today further highlights the subtle scammy tactics being used.
 SHOCKING really!  

Ayr_Rage

@TooOrangeyForCrows you MUST ascertain whether the bills are on estimates or actual readings.

This will be annotated on the bill next to the numerical reading.

Sent in the actual readings you have now and get them to produce a bill.

Why do you think your father is vulnerable?

Age in itself doesn't count.

If he is capable of investing the money himself that suggests he isn't, but all providers have some support for truly vulnerable customers.

molerat

According to the account the last readings were taken/given in November 2024 (so not that many months ago)

That is a lifetime away in the current energy situation, he has gone through the best part of winter and 2 price cap changes on estimated use. Has he actually been billed since that read ?  Reads need to be submitted at least monthly to keep the account in check.  Once a bill has been produced on actual reads he needs to get a refund sorted.  I don't know if Ovo will produce a bill on the submission of  a reading or they default to quarterly / six monthly whatever.  If they don't do monthly then I suggest switching to someone who does and maybe time to fix, Eon are currently fixing for 12mths at a cap use of £1603 v July cap of £1740, current cap of £1866 (for my region, different regions will vary but not by much)

masonic

TooOrangeyForCrows said:
The free money given to the energy company for them to invest elsewhere would have yielded £120-150 within the last 12 months had my dad been able to invest it himself..

They aren't allowed to buy investments using customer credit.

QrizB

TooOrangeyForCrows said:

According to the account the last readings were taken/given in November 2024 (so not that many months ago)

That's an entire winter ago. Read his meters today and submit them to OVO.

TooOrangeyForCrows said:

...though I presume they are still being estimated in some way.

Why do you need to presume anything? Either he's received bills since then with estimated meter readings on them, or he hasn't. Which is it?
If he hasn't been billed since November you really can't claim that he's been paying too large a DD. Submit his readings and let OVO reconcile the account. If he's still in credit you can think about asking for a partial refund and/or a lower DD.