Variable Direct Debit from Energy Companies
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martins_fan
Posts: 3 Newbie
in Energy
Hi,
Does anyone know why energy companies cannot do a variable Direct Debit to clear your account every month in the same way your mobile phone or internet provider can. I would prefer to pay my Gas/Electric every month in full like I do with all the other bills (Never a borrower nor lender be..)
I can see the flat monthly payment DD evens out the bills if you stay with a company for a long time but at the switching point there is always a reckoning which negates the smooth monthly progress we are sold by the energy companies.
Having experiencing several switches typically what happens is:
- In winter you have a big bill to clear on the old account plus possibly a new DD taken by the new provider before the switch is complete. Tricky if it happens in December... (£100, £100, £100 - this is going well - time to switch final bill £250 plus £120 for the new provider...ouch)
- In summer you have to wait 6,7,8 weeks for the final bill and repayment which is just annoying
I'm guessing the business model is based on advance payments rather than historic payments but given there is an ahead/behind thing going on all the time surely a net zero picture works just as well. I know you can keep an eye on it and over pay if its getting behind but its just too much fuss when all of the other bills sort themselves out so well.
Anyone know any more?
Does anyone know why energy companies cannot do a variable Direct Debit to clear your account every month in the same way your mobile phone or internet provider can. I would prefer to pay my Gas/Electric every month in full like I do with all the other bills (Never a borrower nor lender be..)
I can see the flat monthly payment DD evens out the bills if you stay with a company for a long time but at the switching point there is always a reckoning which negates the smooth monthly progress we are sold by the energy companies.
Having experiencing several switches typically what happens is:
- In winter you have a big bill to clear on the old account plus possibly a new DD taken by the new provider before the switch is complete. Tricky if it happens in December... (£100, £100, £100 - this is going well - time to switch final bill £250 plus £120 for the new provider...ouch)
- In summer you have to wait 6,7,8 weeks for the final bill and repayment which is just annoying
I'm guessing the business model is based on advance payments rather than historic payments but given there is an ahead/behind thing going on all the time surely a net zero picture works just as well. I know you can keep an eye on it and over pay if its getting behind but its just too much fuss when all of the other bills sort themselves out so well.
Anyone know any more?
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Comments
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Of course they are quite capable of only taking the amount of the bill, but if they did that the industry wouldn't have an excuse to accrue hundreds of millions of pounds worth of free credit from their customers.0
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If Ofgem were any good they'd make Variable Direct Debit the default.
It would also stop all the nonsense about trying to reclaim hundreds of pounds of credit when an energy company goes bust, sadly now all too common because of Ofgem's incompetence.1 -
If Ofgem were any good they'd make Variable Direct Debit the default.
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Variable direct debits ARE the default.
The DD mandate gives the company the discretion to vary the monthly DD payment as they see fit; the only stipulation is they must inform you in advance of any change in the DD amount.
The whole point of the DD system for most people is the aim to pay(ideally) 12 equal monthly payments in the year and not having huge winter bills.
You appear to be asking for a monthly billing cycle where the amount spent each month is known, and settled in full. Unless you have a smart meter that would mean the meters read on time each month.0 -
Not in my experience, most companies I've used insist that DDs are fixed.Variable direct debits ARE the default.
Yes, that's exactly what I want ! Same as at the petrol pump, the supermarket, the restaurant, the credit card bill, the water bill and just about everything and everywhere else. There's no build up of credit at my expense, and I've happily managed to read my unsmart meter for several decades, it's not exactly onerous.You appear to be asking for a monthly billing cycle where the amount spent each month is known, and settled in full. Unless you have a smart meter that would mean the meters read on time each month.0 -
Symbio get close - they bill you in advance for 1/12 of your estimated annual consumption, then on the next bill they check against your reading and refund or charge more as appropriate, whilst also charging for the next month in advance.
But there are a few things I've experienced with Symbio so far:
They charge me less than the rate I signed up for.
Bills contain basic mathematical errors (although the reality here is probably that the 10.870p per unit they print on the bill is actually 10.876 - hence their multiplication just appears wrong).
Their estimating algorithm gives me free units if I provide a reading a day or more later than the last day of their previous estimating period.
Bills have basic spelling errors, which looks very amateurish.
But most significantly, this month (Jan 2020), they threw away their sensible approach and almost doubled their estimates - thus emptying their customers already strained bank accounts of more money than was actually necessary. Their pathetic excuse for this was that we all apparently use stacks more electricity in winter. Forgetting that we were all already paying them 1/12 of the annual figure each month which was going to even out over the year.
So if you have a PhD in maths and find traditional suppliers' clear and unambiguous billing a bit boring - Symbio could be for you!
PS: I suspect that because this is the energy industry - which is so backwards it makes dinosaurs look trendy - the real answer could be "we've always done it this way".0 -
On the contrary, FDDs can make it quite difficult to see what's going on. Some forumites have even been misled about whether they are in debit or credit because different companies show account balances in different ways.traditional suppliers' clear and unambiguous billing a bit boring
It's much easier to bill for actual usage, as was always the case. However, I agree that FDDs should be available on request for anyone who still wants them.0 -
On the contrary, FDDs can make it quite difficult to see what's going on. Some forumites have even been misled about whether they are in debit or credit because different companies show account balances in different ways.
It's much easier to bill for actual usage, as was always the case. However, I agree that FDDs should be available on request for anyone who still wants them.
Well, relative to Symbio, I've always found every other suppliers' bills easily understandable.
I spent hours trying to work out what Symbio are actually doing - but then it was probably made harder by the fact that what they've done is broken and utter nonsense.0 -
EDF did variable DD for me though it was a few years ago. I was on the usual fixed tariff with fixed monthly DD (subject to review as always) and it was supposed to be quarterly billing (4 PDF bills a year to file away). I complained that every month when I submitted a reading that generated a new bill. I asked for quarterly billing and what they offered me was variable DD for the billed amount every quarter without a change of tariff.0
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Originally Posted by Cardew
Variable direct debits ARE the default.Not in my experience, most companies I've used insist that DDs are fixed.
Can you show me any energy company that uses a fixed direct debit for their normal energy account. (not a standing order where the customer sets the amount)
Every DD I have every used with an energy company is variable. We normally agree on an initial sum and that is paid mothly unless the energy company increases or reduces the payment and notifies me in advance.
https://ddinsights.fastpayltd.co.uk/blog/direct-debit-mandate-template-a-download-and-guide
Copy of the standard DD mandate in the above link
If the company can vary the amount of the DD(after review) it is by definition 'variable'!!The Direct Debit Guarantee This Guarantee is offered by all Banks and Building Societies that accept instructions to pay Direct Debits. If there are any changes to the amount, date or frequency of your Direct Debit, FastPay Ltd Re Your Company Ltd will notify you five working days in advance of your account being debited or as otherwise agreed. If you request FastPay Ltd Re Your Company Ltd to collect a payment, confirmation of the amount and date will be given to you at the time of the request. If an error is made in the payment of your Direct Debit by FastPay Ltd Re Your Company Ltd or your Bank or Building Society, you are entitled to a full and immediate refund of the amount paid from your bank or building society. – If you receive a refund you are not entitled to, you must pay it back when FastPay Ltd Re Your Company Ltd asks you to. You can cancel a Direct Debit at any time by simply contacting your Bank or Building Society. Written confirmation may be required. Please also notify us.0 -
Yes, that's exactly what I want ! Same as at the petrol pump, the supermarket, the restaurant, the credit card bill, the water bill and just about everything and everywhere else. There's no build up of credit at my expense, and I've happily managed to read my unsmart meter for several decades, it's not exactly onerous.
However many people prefer the DD system to the get the amount evened out over the year. I don't want, say, a £250 gas bill payment taken from my bank in mid winter and £50 taken in summer.
You and I may manage to read our meters regularly, but there is plenty of evidence on MSE that many can't, or can't be bothered, to read them annually.0
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