Security Deposit caution - So Energy, maybe others

Chrysalis

The article interestingly has a line about Ofgem backing out of 100% ring fencing of credit balances as an effective acknowledgment some suppliers are inadequately funded.

MWT

Chrysalis said:

The article interestingly has a line about Ofgem backing out of 100% ring fencing of credit balances as an effective acknowledgment some suppliers are inadequately funded.

A well hedged energy supplier has paid in advance for a lot of the energy it predicts it will need, similarly credit balances are used to pay for future energy used, if you 100% ring-fence credit balances then you potentially limit the ability to hedge as the cash has to come from somewhere...

Ofgem has to recognise that if it limits the ability of suppliers to manage debt through imposing PAYG meters, caps the profit margin on the SVT  and ring-fences all credit balances it is going to cause more supplier failures, rather than reducing them.  

diyeco

Update:  (and thank you for advice above).
So Energy sent a bland email claiming they had addressed all the concerns and would I close/withdraw the complaint.  They actually said nothing new, and had not answered the various queries/points (as above).

I therefore asked them for a Deadlock letter, which (I was a little surprised) they quickly provided, and it not too unfairly summed up the issues.  I therefore initiated the Energy Ombudsman (EO) process, they accepted the dispute and I compiled and uploaded all my evidence.

Somewhat surprised to then get notified that by the EO "So Energy has contacted us to query the acceptance of your complaint. We are currently reviewing the query and will be in touch once this has been completed".  The EO had previously said "The supplier may also dispute your case if they feel it does not meet the criteria for us to take it on".  Surprising So Energy tried this angle given their Deadlock letter confirmed the issue(s) and told me how to take it to the EO 

However the EO has now rejected this query from So Energy, and they have to upload their response.  Standby for the next instalment 

WiserMiser

Suggest you pay by Variable DD if you're not already doing so.  That will minimise the amount of your money that they hold.

bristolleedsfan

WiserMiser said:

Suggest you pay by Variable DD if you're not already doing so.  That will minimise the amount of your money that they hold.

How does that help O/P ?????

"I recently switched to So Energy for electricty - well tried to.  I signed up as a Direct Debit customer and fortunate to have good credit scores, so given their T&Cs:

“Security Deposit” means an advance payment to cover any future charges. The amount depends on your individual circumstances.
3.5 Before we begin to process your switch and take you on supply, we will conduct a credit check on you if you pay on receipt of a bill. ...
3.5.1 We can ask you to pay a Security Deposit if you do not pass our credit check. ....

I was surprised when they demanded a (fixed) £250 Security Deposit or the switch would be cancelled"

WiserMiser

bristolleedsfan said:

WiserMiser said:

Suggest you pay by Variable DD if you're not already doing so.  That will minimise the amount of your money that they hold.

How does that help O/P ?????

It means that if SO Energy go bust they won't also be sitting on a pile of the OP's credit for eight weeks in addition to the Security Deposit, so it's an indirect benefit.

bristolleedsfan

WiserMiser said:

bristolleedsfan said:

WiserMiser said:

Suggest you pay by Variable DD if you're not already doing so.  That will minimise the amount of your money that they hold.

How does that help O/P ?????

It means that if SO Energy go bust they won't also be sitting on a pile of the OP's credit for eight weeks in addition to the Security Deposit, so it's an indirect benefit.

According to this post So Energy stopped offering Variable DD by August 2024  https://forums.moneysavingexpert.com/discussion/6546365/so-energy-variable-direct-debit

No mention of Variable DD.  https://justsoyouknow.so.energy/posts/2110491-what-payment-methods-do-you-offer

WiserMiser

Wrong on both, I'm afraid ! 😈

I joined SO Energy in June 2025 and I'm paying by Variable DD.

They also offer the halfway house of Seasonal DD as well as the sensibly-named Equal DD.

Similarly, you can top up with Amex, but they only mention Visa, MasterCard, Maestro and JCB.

Energy companies don't always promote all the options, sometimes you have to ask.

diyeco

WiserMiser said:

bristolleedsfan said:

WiserMiser said:

Suggest you pay by Variable DD if you're not already doing so.  That will minimise the amount of your money that they hold.

How does that help O/P ?????

It means that if SO Energy go bust they won't also be sitting on a pile of the OP's credit for eight weeks in addition to the Security Deposit, so it's an indirect benefit.

As the OP, somewhat academic since I would not let So Energy sit on any of my money.
The £250 Security Deposit requested is almost exactly what I paid Tomato for 1 years electricity and S/C (£252.99), which IMO was outrageous - and nor was it protected, so likely lost forever if So Energy went under...

diyeco

(As OP) Thank you for the advice above.

As suggested I took So Energy (SO) to the Energy Ombudsman (EO), and after 1 query have accepted their decision(s).

The complaint essentially boiled down to 2 issues.

[1] Security Deposit. I felt the T&Cs should not require a Security Deposit, and the fixed £250 was higher than guidance. The EO half agreed, in that SO T&C wording was unclear, but stated Security Deposits are permitted by regulation. In my case the £250 was not significantly out of guidance.

The strange method, via an unlisted number I had to call to pay it, and the concerns over "phishing" etc., the EO found my concerns were reasonable, and SO communications were unclear.

[2] Customer Service. My complaint was this was poor and inconsistent. The EO agreed.

On [1] SO energy have to write an apology letter to me, and for [2] pay me £75.

My main concern was SO were improperly collecting Security Deposits to act as funding required by Ofgem. This was not a matter directly for the EO - more Ofgem. The EO acknowledged that the way SO hold deposits may not be protected (other suppliers hold it as your credit balance so would be protected). With regard to SO's vague and varying responses, the EO stated "However, I have not seen
evidence that, So Energy knowingly provided false information." - read into that what you wish.

I have no other experience of the EO, so do not know where this decision / resolutions sits amongst others. I feel they gave me a fair hearing, found largely (but not wholly) in my favour. The wider issue is more for Ofgem, whether I pursue this I do not know. Certainly I am glad to be well away from SO, and not loaning them an unprotected £250 to sort their funding issues.

I'll wait to see if SO appeal, and/or how grudgingly they write their apology and pay me £75. The EO noted I was never "on supply" from SO, and no direct losses.