Outfox refusing to give full refund

Bendo

WiserMiser said:

Ildhund said:

WiserMiser said:

Ofgem then changed the rules, requiring 'Fixed' DDs to remain in credit throughout the year.

@WiserMiser I haven't been able to find any documentation for this requirement. Can you please provide a reference?

From https://publications.parliament.uk/pa/cm5803/cmselect/cmpubacc/41/summary.html: The Committee of Public Accounts reported the following:-

Minimum Capital Requirement

All energy suppliers who supply energy to homes must have a minimum amount of financial buffer so that they are resilient to changes in the energy market. This is called a ‘common minimum capital requirement’. This requirement helps to lower the risk of suppliers going out of business during uncertain times, for example when energy prices went up in 2021.

Customer Credit Balances

Suppliers must not overly rely on customers money to fund their business. We may tell suppliers to set aside customer credit balances from other financial resources in certain circumstances. This means that if an energy customer’s account is in credit, their supplier will still have the money to repay in a timely manner.

Minimum Capital Requirement

Licensed energy companies who supply energy to domestic customers must meet a Capital Target of £115 of adjusted net assets per dual fuel equivalent customer, with a Capital Floor of zero pounds.  Adjusted net assets describes the types of capital that are more likely to be able to absorb losses so that companies are more resilient to sudden changes in market conditions.

From https://publications.parliament.uk/pa/cm5803/cmselect/cmpubacc/41/summary.html

On 13 Nov 22 the Committee of Public Accounts reported that the SoLR costs incurred by the failed energy companies meant that all customers had to pay an extra £94 because of Ofgem's poor performance.  Adjusted for inflation since then, that £115 figure seems spot on.

None of that backs up your statement that Ofgem have changed the rules and require customers to be in credit. 

QrizB

WiserMiser said:

WiserMiser said:

@BikingBud It may be that the Octopus info is now out of date.

@BikingBud Yes, as I suspected, Octopus changed the rules less than four weeks ago.

Octopus were requiring accounts to be kept in credit well before that.

I posted about it back in January, and it wasn't new then.

https://forums.moneysavingexpert.com/discussion/comment/81236311/#Comment_81236311

Scot_39

BikingBud said:

molerat said:

They are complying with OFGEM policy of keeping customer accounts in credit.  You could always ask if they will do variable DD where you pay for your monthly use but that could lead to higher payments in winter.

Rubbish, they do not have to keep your account in credit it is a risk decision by them that keeps your money.

I have challenged Octopus on this a number of times and they have confirmed that they still use this model:




I agreed the I would reset my balance in May, but it makes little difference. 

Full details here: https://octopus.energy/blog/credit-refund-account-balance/#:~:text=On%20the%20whole,%20you%20should,might%20be%20worth%20refunding%20some

And how old is that blog post..

Because there new policy is you have to be 5 weeks in credit by April.

https://octopus.energy/blog/direct-debit-payments/


"We then work out where your balance is expected to be in April - If you’ll have less than five week’s credit at the beginning of April, we’ll work out the difference and spread this over 12 months as a balance-adjustment and add this amount to your suggested monthly payment."


Compare that with April being the trough on the graph.


The new policy has been shifting that old fashioned version of the debit credit cycle - the basis of that whole graph up - it's been in progress for at least 2-3 years due to the energy company debt crisis.

£4.15bn and counting in debt plans and 91 day arrears.

You now have to maintain a credit balance at all times - as a condition of annualised direct debit plans at Octopus and other suppliers.

BikingBud

Scot_39 said:

BikingBud said:

molerat said:

They are complying with OFGEM policy of keeping customer accounts in credit.  You could always ask if they will do variable DD where you pay for your monthly use but that could lead to higher payments in winter.

Rubbish, they do not have to keep your account in credit it is a risk decision by them that keeps your money.

I have challenged Octopus on this a number of times and they have confirmed that they still use this model:




I agreed the I would reset my balance in May, but it makes little difference. 

Full details here: https://octopus.energy/blog/credit-refund-account-balance/#:~:text=On%20the%20whole,%20you%20should,might%20be%20worth%20refunding%20some

And how old is that blog post..

Because there new policy is you have to be 5 weeks in credit by April.

https://octopus.energy/blog/direct-debit-payments/


"We then work out where your balance is expected to be in April - If you’ll have less than five week’s credit at the beginning of April, we’ll work out the difference and spread this over 12 months as a balance-adjustment and add this amount to your suggested monthly payment."


Compare that with April being the trough on the graph.


The new policy has been shifting that old fashioned version of the debit credit cycle - the basis of that whole graph up - it's been in progress for at least 2-3 years due to the energy company debt crisis.

£4.15bn and counting in debt plans and 91 day arrears.

You now have to maintain a credit balance at all times - as a condition of annualised direct debit plans at Octopus and other suppliers.

Suggested? I wonder what that means!

Alongside the graph I linked is the comment:

Your balance will generally be at its lowest around May following higher winter payments. This will even out again when the weather gets warmer and you use less energy.

So expected as lowest and expected to even out.

Just demonstrate that you are in control, and reconcile at year end if there is a need.

I am not on smart meter, i submit readings every 28 days and keep track, they have suggested that my DD should increase but their model is crap. I've told them not to.

In line with what we agreed I paid £50 in May to zero the account and we start again, I am up (ahead) going into winter and in Spring I am down and I will settle in May again. 

Or be a slave!

Scot_39

Suggested I guess rationally would mean current annual cost / 12.

Its the same adjustement as I used to adjust my own DD - to aim for a zero balance

New DD = (New Cost prediction for next year - Any Credit + Any Debit )  / 12

So if your annual bill £1200 pa - suggested = £100 pm

If you April was £300 below the 5 week target - adjustment = £25.

So youd be on £125 - until you catch up the shift - and then go back to £100.

And Octopus aren't the only ones moving that way - Ovo had / have ? a similar system - but I've yet to wrap my head around a recent post about their latest from another forumite.

And EOn Next are also explicit

https://www.eonnext.com/policies/terms-and-conditions

"4.3.3 You should keep your account in credit and we’ll track and carry the balance forward to the next month’s Statement of Account;"

backyardee

Thanks everyone, seems to be Ofgem are at the nose of the dogs that the country is heading towards... I shall shop around. Besides I won't have any solar panels and not using quite so much electricity.

MWT

QrizB said:

WiserMiser said:

WiserMiser said:

@BikingBud It may be that the Octopus info is now out of date.

@BikingBud Yes, as I suspected, Octopus changed the rules less than four weeks ago.

Octopus were requiring accounts to be kept in credit well before that.

I posted about it back in January, and it wasn't new then.

https://forums.moneysavingexpert.com/discussion/comment/81236311/#Comment_81236311

I've been posting that clause for a very long time, it certainly isn't new and I don't think it has changed in the last 5 or 6 years...

Scot_39

backyardee said:

Thanks everyone, seems to be Ofgem are at the nose of the dogs that the country is heading towards... I shall shop around. Besides I won't have any solar panels and not using quite so much electricity.

Debt is expensive for suppliers - especially now that interest rates have returned from emergency rates held down for far too long - to pre financial crash norms in the 4-6% range.

Far too many got far too lazy about proper financial standards - when credit was cheap.

And arguably the move to positive credit balances is just another part of the price we pay - to help balance the £4.15bn in debts and arrears - that currently add another  £50 total for all debt in the cap - now that it's components has been lumped together.

Anyone who has run a business ignores debt and cashflow costs at their peril.  

BikingBud

MWT said:

QrizB said:

WiserMiser said:

WiserMiser said:

@BikingBud It may be that the Octopus info is now out of date.

@BikingBud Yes, as I suspected, Octopus changed the rules less than four weeks ago.

Octopus were requiring accounts to be kept in credit well before that.

I posted about it back in January, and it wasn't new then.

https://forums.moneysavingexpert.com/discussion/comment/81236311/#Comment_81236311

I've been posting that clause for a very long time, it certainly isn't new and I don't think it has changed in the last 5 or 6 years...

Octopus might have been but my point is that this is a business decision not regulation. The requirement posted above requires them to retain liquidity.

But claiming that we must be in credit and trying to blame OFGEM is just what they do.

BikingBud

Scot_39 said:

Suggested I guess rationally would mean current annual cost / 12.

Its the same adjustement as I used to adjust my own DD - to aim for a zero balance

New DD = (New Cost prediction for next year - Any Credit + Any Debit )  / 12

So if your annual bill £1200 pa - suggested = £100 pm

If you April was £300 below the 5 week target - adjustment = £25.

So youd be on £125 - until you catch up the shift - and then go back to £100.

And Octopus aren't the only ones moving that way - Ovo had / have ? a similar system - but I've yet to wrap my head around a recent post about their latest from another forumite.

And EOn Next are also explicit

https://www.eonnext.com/policies/terms-and-conditions

"4.3.3 You should keep your account in credit and we’ll track and carry the balance forward to the next month’s Statement of Account;"

I can do the maths thanks but I am not behind I am on the Sine wave payment cycle.

Where do OFGEM say I need to add that extra in?