British Gas - £570m Profits Reported

Cardew

pollypans wrote: »

I have been reading with interest everyone's comments about British Gas and can see arguments from all sides. However, my reason for searching for comments is that this morning I was presented with my BG quarterly account and a notification that my monthly DD payments will increase from £32 to £51 (59%!!!). Price increase of 15% is one thing but how does that justify raising my DD payment by 59%?! I think I'm missing something.Also, on the point of customer service, when I called BG this morning to query my future DD charges I was given a recorded message to say that the service was closed for upgrades to their billing system. Just a coincidence/bad timing on the day that millions of customers might be receiving the same notification?

The normal reason for DDs increasing dramatically is that a large debit balance has built up and that is being recovered on top of the increased charge.

Cardew

chocolatechipcookies wrote: »

So is Scottish Power British or Spanish?

Spanish!

It is fully owned by Iberdrola.

Cardew

alared wrote: »

The increasing of DD is yet another "grab the money scam" that is being used by most energy companies and not just BG.

They pretend they have worked out your estimated usage for the coming year and then whack up your DD according to their guesses.

In effect they are holding thousands of pounds of their customers money and getting all the interest.

That is simply not so - well according to the Regulator anyway!

The Regulator has stated that the Energy Companies are in fact owed more money than they owe - e.g. customer's debit balances are far greater than their credit balances.

Look at the scores of posts on MSE where posters state that they are £hundreds indeed £thousands in debt and often get some written off and always get a year or two to pay the deficit back.(without interest charged to them of course)

On 2 of my accounts with BG I finished the accounting year £100 and £50 in credit and this was refunded immediately and my DD reduced - I am on the fixed to 2010 tariff.

It is perfectly valid to criticise all Utility Companies for excess profits if you feel that is true.

However to bluntly state all companies 'pretend' and 'scam' as a deliberate policy based on nothing more than conjecture, cannot be justified.

Or perhaps you can prove those allegations? The admittedly rather toothless Regulator would surely love to know that the figures on cash flow given to him by the companies has been falsified.

Incidentally below is an extract from the Regulator's rules that will protect anyone who 'blows the whistle' on any company carrying out the policy you allege!

Whistleblowing
This policy applies to external whistleblowers (individuals who do not work for Ofgem) who wish to disclose certain information to Ofgem about the activities of companies or individuals operating in the electricity or gas industries.
The Public Interest Disclosure Act 1998 (PIDA) came into force on 2nd July 1999 and is commonly referred to as the whistleblowing legislation.
The PDA creates a framework to enable individuals in the private and public sectors to make disclosures of information which is in the public interest, by giving them protection from victimisation by their employer.
Ofgem treats all disclosures made through the whistleblowing policy in a confidential and sensitive manner. The identity of the individual making an allegation is kept confidential and will only be disclosed with the whistleblower’s consent or on directions of a Court.

pollypans

Cardew wrote: »

The normal reason for DDs increasing dramatically is that a large debit balance has built up and that is being recovered on top of the increased charge.

Thanks. This is true, having never been in debt to them before and paying direct debits regularly for the past 6 years, I now owe them £66.97. If they'd just left my payments at £38 a month last July the balance would have been about right. Can't remember now who made the point about BG gaining interest on my money but I think I will cancel my DD for gas as I still don't think £51/ month is justified. Hopefully I will be able switch to a better offer when all the price rises have been announced. Thanks again for the felpful comments

SwanJon

alared wrote: »

In effect they are holding thousands of pounds of their customers money and getting all the interest.

The idea that energy companies are grabbing all the interest on 'our money' keeps popping up in these threads.
I get around 10% discount on my gas by paying by DD, if I chose to pay quarterly and stuck the money in a high interest account I'd be worse off.
I could do slightly better on electricity as the discount is less, but the difference for the effort is tiny.
The way to make sure you pay for what you use, and their estimates for the coming year more accurate is to keep giving them accurate reads. Most of the websites let you put readings in anytime you want, so you can take a bit more control.

PS - I've just noticed I said E-on & Powergen earlier. My mistake as Powergen became E-on. I meant E-On & nPower.

JohnG

pollypans wrote: »

Thanks. This is true, having never been in debt to them before and paying direct debits regularly for the past 6 years, I now owe them £66.97. If they'd just left my payments at £38 a month last July the balance would have been about right. Can't remember now who made the point about BG gaining interest on my money but I think I will cancel my DD for gas as I still don't think £51/ month is justified. Hopefully I will be able switch to a better offer when all the price rises have been announced. Thanks again for the felpful comments

Hi Pollypans,

Your situation with BG sounded very similar to ours with Npower, they whacked up our monthly payments much more than the publicised percentage increases and when I questioned it they said it depended on where we lived and that the rates publicised were only an average!
It had nothing to do with any outstanding debt (We were in credit by over £100) or indeed was it based on incorrect estimates.
We've switched now so they have lost a longstanding, reliable paying customer - I just hope more people do the same to get the message that such outlandish increases are unacceptable - I honestly fear for people who are already struggling to make ends meet.

Apologies, but I've just got to add - How on earth can the government claim that inflation is below 2.5% every month? It's beyond my comprehension? Fuel costs, Council Tax, Water rates, food etc etc all keep going up well above that year on year.

I gather they somehow link electrical goods and clothes to the figures which apparently keeps the inflation rate down but surely these are costs/areas we have some control over? Utlilities and taxes are pretty much out of our control. :mad:
Sorry for going off on a bit of a tangent but it's something which really bugs me.

Cardew

JohnG wrote: »

Apologies, but I've just got to add - How on earth can the government claim that inflation is below 2.5% every month? It's beyond my comprehension? Fuel costs, Council Tax, Water rates, food etc etc all keep going up well above that year on year.

I gather they somehow link electrical goods and clothes to the figures which apparently keeps the inflation rate down but surely these are costs/areas we have some control over? Utlilities and taxes are pretty much out of our control. :mad:
Sorry for going off on a bit of a tangent but it's something which really bugs me.

The inflation rate is calculated from comparing literally hundreds of goods and services for 'average' households. A good explanation here:

http://www.bankofengland.co.uk/education/targettwopointzero/inflation/whatsInflation.htm

The difficulty with any calculation of inflation is that no single household is 'average'.

For instance in a household of heavy smokers and drinkers, a substantial increase in the price of tobacco and alcohol will cost them a lot of money. Whilst in a non-smoking teetotal household it has zero effect.

This of course is the problem with heating costs. Pensioners on a low income and at home all day might spend, say, 10% of their income on fuel(in fuel poverty). Whilst a high earning couple out at work all day might spend 1% of their income on heating. The average as far as the calculations for the inflation rate is concerned might be, say, 2%.

Obviously a 15% rise in heating costs has a huge effect on the pensioner, but far less on Mr & Mrs Average.

Teacher2301

SwanJon wrote: »

It'd be only fair to comapre it on that basis.
The report says they have 10 million gas customers and 6 million electricity customers = 16 million.
£571 million/16 million customers = £35.69 profit/customer.
(2006 would have been £5.94 profit/customer)
Anyone got any other figures to add?

Considering I paid by DD and ammassed nearly £300 in overpayments - not my fault but BG didn't set up my account for 12months and after I had paid the bill, I was £300 in credit - at 5% interest that works out at nearly £15 profit for BG. Still got my moneyback and now in process of switching - a yearly thing at the moment but with all ths price hikes - who knows which is the best at the moment.

JohnG

Cardew wrote: »

The inflation rate is calculated from comparing literally hundreds of goods and services for 'average' households.

The difficulty with any calculation of inflation is that no single household is 'average'. .

Thanks for the clarification Cardew but I still struggle to believe the figures given are anywhere near accurate even based on averages.

I can't help feeling the government are basically at pains to keep the 'Official' inflation rate down so as to keep a lid on pay rises, especially in the public sector. I appreciate pay rises were to get out of control then the economy would go into free fall so it's probably best we all play ball and accept the government figures - The trouble is that doesn't help when your out goings start to exceed your income.....

SwanJon

Teacher2301 wrote: »

Considering I paid by DD and ammassed nearly £300 in overpayments - not my fault but BG didn't set up my account for 12months and after I had paid the bill, I was £300 in credit - at 5% interest that works out at nearly £15 profit for BG. Still got my moneyback and now in process of switching - a yearly thing at the moment but with all ths price hikes - who knows which is the best at the moment.

If you overpaid by £300, I assume that you used a similar or greater amount.
If this was gas, they offer around 10% discount on it, saving you at least £30.

This isn't a common occurance so while the £15 interest on your overpayment will be included, you then must think about the balanceing interest on all those behind with their bills - or who pay quarterly.

Did they get it set up within the 12 months, or was it longer? They would/should have only charged you for the final 12 months of the bill was for longer.