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MSE News: EDF follows British Gas with energy price rises

edited 30 November -1 at 1:00AM in Energy
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edited 30 November -1 at 1:00AM in Energy
EDF Energy has announced that the price of its standard variable electricity tariff will rise by 2.7% in June - act now to beat the rise...
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'EDF follows British Gas with energy price rises'
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  • aj23_2aj23_2 Forumite
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    It's wrong how they are penalising people who pay by cash or cheque.

    Direct debit they can charge what they like and take it, then you have the hassle of trying to get through to correct it. It's so wrong.
  • nic_cnic_c Forumite
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    Aj23 wrote: »
    It's wrong how they are penalising people who pay by cash or cheque.

    Direct debit they can charge what they like and take it, then you have the hassle of trying to get through to correct it. It's so wrong.
    Because people pay by cheque/cash are more likely to default, so more costs in trying to chase you. DD is covered by the DDG (DD Guarantee) which basically means if they take more than expected, ask your bank to do an indemnity claim, money paid instantly back by your bank and then they reclaim from BG.
    BG will then chase you for payment as they would a cash plan that you hadn't paid.
  • aj23_2aj23_2 Forumite
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    nic_c wrote: »
    Because people pay by cheque/cash are more likely to default, so more costs in trying to chase you. DD is covered by the DDG (DD Guarantee) which basically means if they take more than expected, ask your bank to do an indemnity claim, money paid instantly back by your bank and then they reclaim from BG.
    BG will then chase you for payment as they would a cash plan that you hadn't paid.

    Where is the proof of that? Someone on direct debit may go int overdrafts and incur charges. Someone on direct debit can cancel it.
  • PennineAcutePennineAcute Forumite
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    You have been given to proof, it is called the DDG. I remember once when Virgin media took more than they should have. One phone call to the bank and it was back in my account.
  • aj23_2aj23_2 Forumite
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    You have been given to proof, it is called the DDG. I remember once when Virgin media took more than they should have. One phone call to the bank and it was back in my account.

    That isn't proof that everyone who pays cash or cheque defaults. Proof is statistics. DD only benefits the provider, not the customer. It gives them authority to charge what they like and take it, hoping that you can't be bothered to question it after.
  • SystemSystem
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    Aj23 wrote: »
    It's wrong how they are penalising people who pay by cash or cheque.

    Direct debit they can charge what they like and take it, then you have the hassle of trying to get through to correct it. It's so wrong.

    Suppliers pay their wholesalers in advance of supply. Would consumers that want to pay by cheque or cash be prepared to pay for 3 months of energy in advance of supply?

    Consumers who pay by DD do give the suppliers a source of income to pay their suppliers.
    Other advantages of DDs are:

    — It’s cheaper than cheque, safer than cash
    — You control the date of receipt into your account
    — You get cleared funds in your account on a known date
    — You can collect variable amounts on regular or irregular dates
    — It can eliminate time-consuming reconciliation
    — When used in promotions, it can improve the conversion rate from enquiry to sales.

    Source: Direct Debit Co.
  • ConsumeristConsumerist Forumite
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    Hengus wrote: »
    Other advantages of DDs are:

    — It’s cheaper than cheque, safer than cash
    — You control the date of receipt into your account
    — You get cleared funds in your account on a known date
    — You can collect variable amounts on regular or irregular dates
    — It can eliminate time-consuming reconciliation
    — When used in promotions, it can improve the conversion rate from enquiry to sales.

    Source: Direct Debit Co.
    These appear to be the benefits to the supplier - not the customer.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • SystemSystem
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    These appear to be the benefits to the supplier - not the customer.

    Exactly, which is why suppliers offer discounts etc to those that pay by monthly DD rather than cash or cheque in arrears.
  • nic_cnic_c Forumite
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    Aj23 wrote: »
    That isn't proof that everyone who pays cash or cheque defaults. Proof is statistics. DD only benefits the provider, not the customer. It gives them authority to charge what they like and take it, hoping that you can't be bothered to question it after.
    I never said everyone defaults, just that the default rate amongst cash/cheque payers is higher than those who pay by DD. Yes it does benefit the provider because they know when it will be paid rather than sending out a bill and expecting the money sometime in the next month or so, possibly after you've sent a reminder. That's why they offer the incentive of a discount to pay be DD, it suits them for you to pay by that method.

    The fear of setting up DD's is addressed by the DDG - if the fear is they can take what they like, then no the DDG means you tell your bank and they put the money back in straight away and claw it back from the provider - no delay, no need to request refund from the provider yourself, no need to prove that more was taken than expected.
  • aj23_2aj23_2 Forumite
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    nic_c wrote: »
    I never said everyone defaults, just that the default rate amongst cash/cheque payers is higher than those who pay by DD. Yes it does benefit the provider because they know when it will be paid rather than sending out a bill and expecting the money sometime in the next month or so, possibly after you've sent a reminder. That's why they offer the incentive of a discount to pay be DD, it suits them for you to pay by that method.

    The fear of setting up DD's is addressed by the DDG - if the fear is they can take what they like, then no the DDG means you tell your bank and they put the money back in straight away and claw it back from the provider - no delay, no need to request refund from the provider yourself, no need to prove that more was taken than expected.

    But that's how business works, supply now and pay later. Telefonica didn't take my direct debit in December and threatened me with late payment charges if I didn't pay within 7 days. My bank investigated and it turned out that Telefonica never attempted the make the direct debit after accusing me and the bank. I was in the South China Sea with weak GPS, so I didn't see the emails straight away and couldn't get a strong signal to make a card payment. So it's not always great. Had I have been in charge and been able to pay choosing my own method, that wouldn't have happened.

    They shouldn't be penalising people who don't want to do DD and then charging them more for it. Either they want the business or not, and without us they don't exist.
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