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Back billing - but in credit so Energy Ombudsman found in favour of supplier
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Our direct debit mandate is approx £50 per month higher now as a direct result of the £400 debit.
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Yes it is acceptable according to the rules and correct*. The negative balance will be to do with the combination of credit, usage before the twelve month threshold and usage within the last twelve months.
The position at that point then requires your Direct Debit to be increased to cover your ongoing usage, that is normal account balance management so well within the rules.
*I cannot be 100% sure without having all the specific billing details and recalculating myself, but the fact that Octopus have applied the back billing, followed by the Ombudsman agreeing with them is highly indicative of it being correct. Octopus are usually very good at applying back billing rules when relevant and the Ombudsman would have reviewed this and checked it is correctly applied.
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No expert on this.
Were you similarly in credit in say autumn 2023 and autumn 2024 as a result of the missing units from billing in Mar 2023 ? Thats credit built up in the period 12m before the Sep 25 billing correction issued.
I find the actual license wording confusing - but seen several threads where people have claimed unsuccessfully - and therefore I now tend to agree with paragraph 3 in this post in the EOn thread others pointed you above
The problem is that if they use old credit - that cascades through to all future periods -
New Balance = Old Balance + Use - Payment on Account from DD
Change any usage charge - and all subsequent new balances change - right up to current.
But I would hope - subject to hitting protection on payments in the last 12 months - so £0 credit in Sept 24 a boundary condition - so that bills cannot come forward - and I hope that genuinely new credit cannot cross back over 12m boundary.
Taking £400 in autumn 23 - or autumn 24 - by adding the new new use for Mar 23 - changes all subsequent balances - and effectively zeros out any credit in past upto the £400 demand - and so impacts current balance.
Worse it often gives a false reduction in DD for a period - reduced to clear false credit - which makes the final balance negative.
Is it fair - arguably not - I struggled with the SLC wording - and still do - so not 100% convinced of above.
But on flip side - if you genuinely used the energy - and the DD was a fair representation of the cost of the energy used - would it be fair to suppliers (and in reality other users who would have to cover the costs of doing so) for you to retain a false credit - to get that energy for free ?
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any potential underpayment following any previous reductions or failures to increase the DD.
your useage may have been (as artificially low given increased demand ) leaving you in credit after 2023 error, your future dd then not following true costs amplifies the iimpact.
Simple rule of thumb
new dd required = ( new annual cost - credit + debit ) /12.
If underbilled £400 - you should idealky have had credit assuming 2022/23 dd level was credible ( A big IF bearing in mind that would have included crisis peak - and so had ebss and epg complications - and so a rise to £2100 at tdcv - it might not have exactly matched - many low users saved - many high users bills still rose significantly.)
But just £400 change to credit would in itself I expect lead to step £33 (£400/12) correction over the old annual basis - maybe worse to the Octopus 5 week credit on annualised DD balance by Apr aim point if went harder for that date (not sure they would though).
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Then I'd say it is very unlikely that they have got anything wrong in their calculations.
I can tell that you are finding this very frustrating, but without the back-billing rules in place a supplier could go back 6 years to correct a mistake, so they already penalise the suppliers for omissions quite severely, but they are not there to eliminate the need to pay for energy used where you've already made payments to the supplier.
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I'm with Co-op (powered by Octopus) and pay by variable direct debit for exactly what I use each month. I pay the same rates as people who pay the same amount every month (and would be annoyed if I didn't). So I don't think you would pay any more if you switched to MVDD.
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My disabled mum had 2.5 years of underestimation prior to backbilling - they indeed did claim the whole lot back.
And that despite 2 professional meter readings - I wanted to fight it more aggressively given they ignored those readings - my mum accepted around £100 compensation offer - and paid rest over a year.
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That's interesting. I was definitely paying more and wrote to the ombudsman because the justification is that it costs more to process payments. I was on ESA at the time (now on UC) so money was every 2 weeks and I would make 2 or 3 payments into my account each month via their website.
My argument with Octopus was, okay if it costs you more to process non DD, itemise the cost, and does someone on a pre-payment meter, or writing a cheque cost EXACTLY the same to process as me using my debit card each month?
They declined to engage, sadly. I also spoke about the issue with NEA staff (National Energy Action) as my interest was piqued by the following article:
Customers not paying by direct debit pay vastly more for energy | Disability Rights UK
And interestingly, it was raised in Parliament way back in 2014!!:
Additional Charges for Utility Bills not Paid by Direc - Hansard - UK Parliament
I will happily pay admin fees associated with processing payments - BUT I want them itemised on my bill! 😁
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t
The point is that Octopus charges the same DD prices whether you pay by fixed monthly DD or variable "whole amount" DD. If you pay a different way, standing order or debit card that wouldn't necessarily be the same.
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Ah, yes, sorry , talking cross purposes :-)
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