Economy Energy refusing Refund of Credit Balance
Comments
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That's the theory but in my case at least it doesn't come to fruition: The monthly direct debit I pay is £57.64 but MSE CEC calculates my average at £38.00p per month. So therefore the credit balance just keeps on building and never reduces.
However my point in my previous post is that Scottish Power are not doing what they say they will do in the case of a credit balance. They say they will refund the credit balance which is more than the monthly payment following the annual review.
When is or was your annual review? because that is fundemental to how the direct debit should work.
Assuming that it's been calculated correctly based and a fairly accurate estimate of your annual consumption in kwh then your monthly DD should be 1/12 of your estimated annual cost and should therefore balance out to near enough zero after 12 months.
Most people dont use exactly 1/12 of their energy every month, generally it will be a lot more in the winter months compared to those in the summer
This means that for some periods you'll be in credit and some in debit depending on when the 12 month period started.
If your contract period starts around November then you'll be in debit through winter and just about balance out by the next November. Conversely if it starts in April then you should have a healthy credit by November which will get consumed by April.Never under estimate the power of stupid people in large numbers0 -
matelodave wrote: »When is or was your annual review?
Why is that relevant?0 -
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matelodave wrote: »Because in your post above you state that they'll refund following the annual review, so it's relevent to when they will refund
Hmmm not sure you understand what 'annual' means0 -
martinthebandit wrote: »Hmmm not sure you understand what 'annual' means
I think I do, but some others obviously dont.
But if you feel you need to enlighten us all then please feel freeNever under estimate the power of stupid people in large numbers0 -
Why doesn't the regulator impose an obligation on the outgoing supplier to refund any credit balance within a certain number of days automatically after the final bill is produced?0
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Because the idea of paying for your annual energy with 12 equal payments spread over a year should mean that at the end of your 12 monthly payments the balance should be £0 irrespective of what time of year 'your year' starts.matelodave wrote: »I think I do, but some others obviously dont.
But if you feel you need to enlighten us all then please feel free0 -
martinthebandit wrote: »Because the idea of paying for your annual energy with 12 equal payments spread over a year should mean that at the end of your 12 monthly payments the balance should be £0 irrespective of what time of year 'your year' starts.
Only if you use exactly 1/12 (8.33%) of your estimated energy consumption every month.
I'm guessing that most people use more energy in the winter than they do in the summer.
It's usally around 65-70% between November and March and 30-35% in the remaining seven months so you need to pay a lot more in the winetr than you do in the summer.
So if you start in November you only pay 5 payments which is eqivalent to 41.6% between November and March but you will use 65-&0% of your energy meaning you'll be in debit to the tune of about 27% (give or take).
You'll then owe about three months DD equivalent which has to be recovered in the remaining seven months.
Likewise if you start your 12 months in April, you'll pay for around 58.3% of your annual energy bill but only use about 30% so you'll start the winter in credit equivalent to about three DD payments which will get consumed by the end of March
You should always end up at a zero balance at the end of 12 months but for some of it you will be in credit and some in debit.
That's why I was asking Anthorn when his 12 month review was due. If it is next April then he should be in credit by about 3x his DD and if it was last month then he should be at zero (assuming that his DD & estimates were accurate) and he'd be in debit by the end of this month.
The sums aren't difficult but most people don't actually understand that their energy consumption of the year isn't linear.Never under estimate the power of stupid people in large numbers0 -
matelodave wrote: »Only if you use exactly 1/12 (8.33%) of your estimated energy consumption every month.
I'm guessing that most people use more energy in the winter than they do in the summer.
It's usally around 65-70% between November and March and 30-35% in the remaining seven months so you need to pay a lot more in the winetr than you do in the summer.
So if you start in November you only pay 5 payments which is eqivalent to 41.6% between November and March but you will use 65-&0% of your energy meaning you'll be in debit to the tune of about 27% (give or take).
You'll then owe about three months DD equivalent which has to be recovered in the remaining seven months.
Likewise if you start your 12 months in April, you'll pay for around 58.3% of your annual energy bill but only use about 30% so you'll start the winter in credit equivalent to about three DD payments which will get consumed by the end of March
You should always end up at a zero balance at the end of 12 months but for some of it you will be in credit and some in debit.
That's why I was asking Anthorn when his 12 month review was due. If it is next April then he should be in credit by about 3x his DD and if it was last month then he should be at zero (assuming that his DD & estimates were accurate) and he'd be in debit by the end of this month.
The sums aren't difficult but most people don't actually understand that their energy consumption of the year isn't linear.
Putting to one side the OFTM customer relations debacle, there are two issues here.
1. The customer would like to pay 1/12 of the annual total energy cost and couldn’t really care a jot about debit/credit balances. Any credit/debit issues to be resolved at the end of the contract period. This was how it once was.
2. The inability of smaller suppliers to borrow money linked into Ofgem’s direction that suppliers should not allow customers to go into debt. These are translated into contract clauses such as ‘there has to be a credit balance at at all times’ or ‘there must be enough credit in the account to cover the following month’s charges’. Worst case, a supplier treats a debit balance as a debt (which it isn’t) and it blocks all attempts to switch away.
Clearly, the two issues above are none issues for most suppliers if actual usage in kWhs/year is in line with the plan projection when the contract was taken out, and the transfer of supply was in Spring/earlier Summer. Autumn/Winter switches now tend to lead to higher DDs with some of the smaller suppliers. If you were a Bank, would you lend money to a man with a laptop and a Supply Licence in what has now become a very challenging/volatile domestic energy market?
Harsh as it may seem, we consumers have to take some of the blame when it goes wrong for seeking out the cheapest suppliers. They are perhaps cheap for a reason.0 -
We left Economy Energy on 3 Sep and still have no refund. They say - there is a delay in issuing refunds and they can't say when. I have tried their complaints dept but they say they are doing all they can- which is nothing. They increased our payments 3 weeks after saying there was no need. We have always been in credit and now can't get our money back. The worst customer service we have EVER experienced.0
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