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  • FIRST POST
    • johnsm13
    • By johnsm13 3rd Nov 11, 12:10 PM
    • 4Posts
    • 7Thanks
    johnsm13
    Big hikes in direct debit payments - EON
    • #1
    • 3rd Nov 11, 12:10 PM
    Big hikes in direct debit payments - EON 3rd Nov 11 at 12:10 PM
    I wonder how many other people are having problems with this at the moment - the EON helpline person I spoke to said he had been specially recruited to try to reduce telephone waiting times for people calling about big increases in their direct debit payments.

    I've been with EON since August 2010 with no problems.

    Yesterday I submitted meter readings which generated a new electricity and gas statement showing a debit of 58.18. Not too bad I thought.

    But it also generated one of those "We'd like to change your monthly direct debt to..." notices. In this case, from 115/month to 168/month - a 46% increase. Bit steep I thought.

    Then I looked at page 4 of the statement which details how much EON estimates I will spend in the next 12 months, based on past usage. That forecast a total annual spend of 1330, ie an average of 111/month. In other words, less even than my current direct debit, and a lot less than the 168 EON would like to start relieving me of.

    Having spent a total of two hours trying to get through to EON yesterday and today, here's what I think the confused-sounding temp from the company was saying...

    Traditionally direct debits work on the assumption that customers will be in arrears at the end of the high-usage winter period (say by the time next April comes round). That debt then gets worked off as you pay the same monthly amount over the low-usage summer period.

    What I think the EON representative was telling me... was that they have now turned traditional thinking on its head, by aiming for zero balances by April. Which means customers build up big surplusses over the summer, rather than pay off their debt.

    Hence the massive rise in my direct debit.

    Please could I ask the EON folk that frequent these pages if that sounds at all right? If so, it sounds like a significant change in approach to how direct debits function.

    I can't afford such a big leap in my monthly payment - unwarranted by changes to my demand patterns - so I have been forced to switch to "on demand" payment, ie paying off each quarterly bill as it arrives. Yes, the tariff's higher - but, again, I can't afford an immediate 46% jump in energy costs.

    Do the energy companies really want to drive customers back to on demand payment? I just don't get it.

    Mike Johnson
Page 1
  • E.ON Company Representative: Helena
    • #2
    • 3rd Nov 11, 12:30 PM
    • #2
    • 3rd Nov 11, 12:30 PM
    Hi Mike,

    I thought I would pop on to give you a bit of general DD info.

    The idea is that you pay an amount each month, you should build up a credit balance over the summer months as this will then go towards your larger winter bills.

    We also aim for a zero balance in spring, so this then allows us to calculate the Direct Debit for the coming 12 months. This will be calculated on your previous usage.

    Also at the spring review we will refund any credit you have over 5.

    At this time of year, your account should have a credit balance to help with the higher winter bills.

    I will be more than happy to check your account specifically for you if you would like me to, just to make sure nothing has gone wrong.

    Just email me at WebForumAdvisors@eonenergy.com.

    Thanks

    Helena
    Official Company Representative
    I am an official company representative of E.ON. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
    • johnsm13
    • By johnsm13 3rd Nov 11, 12:41 PM
    • 4 Posts
    • 7 Thanks
    johnsm13
    • #3
    • 3rd Nov 11, 12:41 PM
    • #3
    • 3rd Nov 11, 12:41 PM
    Thanks for such a speedy reply Helena. I will contact you directly.

    I still really think this is very difficult to explain to customers (and the EON person I spoke to certainly struggled).

    What is the point putting a forecast on a statement that I will use the equivalent of 1330 gas and electricity over the next year, then fixing a direct debit that would mean the payment of 2016 (12 x 168)? Why not just divide 1330 - the forecast - by 12?

    Mike
  • E.ON Company Representative: Helena
    • #4
    • 3rd Nov 11, 12:45 PM
    • #4
    • 3rd Nov 11, 12:45 PM
    Thanks for such a speedy reply Helena. I will contact you directly.

    I still really think this is very difficult to explain to customers (and the EON person I spoke to certainly struggled).

    What is the point putting a forecast on a statement that I will use the equivalent of 1330 gas and electricity over the next year, then fixing a direct debit that would mean the payment of 2016 (12 x 168)? Why not just divide 1330 - the forecast - by 12?

    Mike
    Originally posted by johnsm13
    Brill,

    If you email your account number or address, I can get on to it right away.

    Helena
    Official Company Representative
    I am an official company representative of E.ON. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
    • DirectDebacle
    • By DirectDebacle 3rd Nov 11, 1:00 PM
    • 2,027 Posts
    • 2,177 Thanks
    DirectDebacle
    • #5
    • 3rd Nov 11, 1:00 PM
    • #5
    • 3rd Nov 11, 1:00 PM
    Just a few of the threads by Eon customers experiencing similar problems:

    http://forums.moneysavingexpert.com/showthread.php?t=3531893&highlight=

    http://forums.moneysavingexpert.com/showthread.php?t=3573373&highlight=

    http://forums.moneysavingexpert.com/showthread.php?t=3578607

    http://forums.moneysavingexpert.com/showthread.php?t=2861072

    http://forums.moneysavingexpert.com/showthread.php?t=2262031

    Have a read and if you feel their DD policy was never properly explained to you at the time you joined them, insist the DD is set to 1/12th of annual usage per month from the date you joined to the correct anniversary date, which will be August not 'spring'.

    If they refuse complain in writing and also pass a copy of the complaint to Consumer Focus.

    Please let us know how you get on.
    Last edited by DirectDebacle; 03-11-2011 at 1:09 PM. Reason: Additional Info.
  • jalexa
    • #6
    • 3rd Nov 11, 1:22 PM
    • #6
    • 3rd Nov 11, 1:22 PM
    I've been with EON since August 2010 with no problems.
    Originally posted by johnsm13
    As has just been pointed out this issue has form. Your formal starting point should be to ask your supplier for a calculation in compliance with Standard Licence Condition 27.14. You should request a stay on the increase pending the provision (and agreement) of the calculation. You should make any failure to provide an SLC27.14 compliant explanation a formal complaint.

    I don't want to argue the pros and cons of "spring alignment" here, but a slightly different argument. You have been a customer since August 2010 and have therefore already been subject to a spring "annual review". In theory you could have had an "interim" revew after 6 months. The issue is why the last "annual review" (April/May 2011) apparently has failed to set an accurate monthly payment sufficent to deliver a zero account balance by the following "annual review" (April/May 2012). In my opinion, if you are blameless on that issue, you should not be subject to an excessive short year payment arising from the seasonality of your heating fuel and the supplier's failure to calculate an accurate payment at the previous annual review.

    I cannot comment on the accuracy of the calculation without the gas/electric split. Did Eon provide split gas/electric projections? If not you should ask why not. Without that it is impossible to verify the accuracy of the calculation.
    Last edited by jalexa; 03-11-2011 at 2:47 PM.
    • johnsm13
    • By johnsm13 3rd Nov 11, 1:34 PM
    • 4 Posts
    • 7 Thanks
    johnsm13
    • #7
    • 3rd Nov 11, 1:34 PM
    • #7
    • 3rd Nov 11, 1:34 PM
    Blimey, I had a feeling there might be a backstory to all this!

    Thanks DirectDebacle for those helpful links. I did key "EON" and "direct debit" into the search box but none of these came up in the first few of the hundreds of pages of results.

    Jalexa - yes, EON provided a projection split of 677 for gas and 653 for electricity.

    I have now spoken to EON's Helena and agreed a smaller direct debit increase, which is bad news but not such bad news as before.

    It seems folks on a zero-balance spring review have to accept they'll be lending their energy supplier big bucks over the summer, rather than working off a winter debt.
    • DirectDebacle
    • By DirectDebacle 3rd Nov 11, 2:27 PM
    • 2,027 Posts
    • 2,177 Thanks
    DirectDebacle
    • #8
    • 3rd Nov 11, 2:27 PM
    • #8
    • 3rd Nov 11, 2:27 PM
    Thank you for the update. What concerns me is that it appears that you and the other posters in several threads have been taken completely by surprise by the 'zero spring balance' policy.

    Eon have assured us that their policy is correctly explained at the time customers sign up. If that is the case there should be no reason why customers question DD increases on that basis. I suspect that the policy is not correctly explained. When you joined in August last year you should have received a letter from Eon explaining precisely how their DD worked. Do you still have that letter. If so what does it say? It would be helpful if you could post it on here.

    If you feel it wasn't clearly explained to you then I would ask that you still bring it to the attention of Consumer Focus (here) who have an interest in this. It matters not that you have now resolved your concerns to your own satisfaction. You were still misled.

    If Eon can be persuaded to act like a decent, honest and trustworthy company, that will be of benefit to all their customers. Particularly for those who are less able or astute as you to question their practices.
    Last edited by DirectDebacle; 03-11-2011 at 2:33 PM. Reason: Add link.
  • marshdaisy
    • #9
    • 3rd Nov 11, 2:36 PM
    EON DD Problems
    • #9
    • 3rd Nov 11, 2:36 PM
    We recently had a similar problem with Eon - they total mischarged us on a bill, which was subsequently credited. But they then decided to up our dd by 80% due to the estimate against the wrong invoice. Eventually managed to speak to someone and pointed out the problem, and I stated I did not give them my authority to change our dd - the rather grumpy operator then told me if I didn't accept the new figures I would have to pay by another method and lose my discount for direct debits! Went a bit higher up the food chain and got my dd kept at the same level but it took a lot of time and stress sorting out plus having to threaten them with taking action under the Direct Debit Guarantee................... Life shouldn't be like this!
    • david39
    • By david39 3rd Nov 11, 2:50 PM
    • 1,940 Posts
    • 1,565 Thanks
    david39
    Had a similar increase AND a change of tariff so did what the Energy Minister suggested and shopped around.
    I've got a >100 saving by moving to NPower.
    • backfoot
    • By backfoot 3rd Nov 11, 2:58 PM
    • 2,680 Posts
    • 2,215 Thanks
    backfoot
    Good advice from Jalexa and DD above.

    I would add:

    It looks like you have been caught our by this nonsensical and unfair policy because;

    1. They are absorbing a price rise over less than a year.
    2. They have factored in the remaining seasonality based on consumption patterns from last year's harsh winter.

    Both of these factors are unfairly weighted in Eon's favour and cause the higher than expected DD increases.

    By following Direct Debacle's advice to report the matter to Consumer Focus you can prevent this unfair practice from continuing. It is my personal view that it is a clear and inherent breach of the Standard License Conditions.

    The backlog of complaints is symptomatic that something is clearly wrong. Eon's continued intransigence is shameful imho, as are the reports that they threaten to withdraw the discounts.
    Last edited by backfoot; 03-11-2011 at 3:00 PM.
  • jalexa
    What concerns me is that it appears that you and the other posters in several threads have been taken completely by surprise by the 'zero spring balance' policy.
    Originally posted by DirectDebacle
    If you look at Eon's explanation retrospectively it is "not wrong" but certainly bland and innocuous. What is completely unreasonable for an energy layperson to appreciate is that (according to Eon's own late in the day, but still welcome, Twitter table) 80% of the annual heating fuel is consumed in the 6 months from November until April.

    It is inevitable that any payment profile deficit at this time of year (with a "spring review") will result in an excessive payment hike of approximately 60% (30% seasonally excess consumption over a 6 month short year). It is a disgrace that the regulator and/or consumer representation is silent on this mathematically proveable outcome.

    The particular case described by the OP is unusual in that in spite of the account already having been subject(able) to an "annual review" (April/May 2011 according to Eon published information) the payment "set" (or allowed) has resulted in a seriously inadequate account balance 6 months down the line. I do not know the reason in this case but I cannot accept that these issues always seem to end up with the customer paying up-front for a process failure not entirely, or not at all, of the customer's making.
    Last edited by jalexa; 03-11-2011 at 3:27 PM.
    • dshart
    • By dshart 3rd Nov 11, 3:14 PM
    • 431 Posts
    • 256 Thanks
    dshart
    Just think, for every complaint you see about unreasonable increases in the DD payment to EON there are quite a few others who just accept the increase on face value without questioning it and it makes you realise how much EON are making on it.

    I had enough of their messing around changed to a new supplier who also turned out to be cheaper, but unfortunately reading these forums it seems my new supplier plays the same kind of tricks with the DD, so I will have to see how it unfolds.
    • backfoot
    • By backfoot 3rd Nov 11, 3:32 PM
    • 2,680 Posts
    • 2,215 Thanks
    backfoot

    I still really think this is very difficult to explain to customers (and the EON person I spoke to certainly struggled).

    What is the point putting a forecast on a statement that I will use the equivalent of 1330 gas and electricity over the next year, then fixing a direct debit that would mean the payment of 2016 (12 x 168)? Why not just divide 1330 - the forecast - by 12?

    Mike
    Originally posted by johnsm13
    Because it would not fit in with manipulative policy they have designed. It should and always used to work the way you suggest.
    • DirectDebacle
    • By DirectDebacle 4th Nov 11, 11:09 AM
    • 2,027 Posts
    • 2,177 Thanks
    DirectDebacle
    If you look at Eon's explanation retrospectively it is "not wrong" but certainly bland and innocuous. What is completely unreasonable for an energy layperson to appreciate is that (according to Eon's own late in the day, but still welcome, Twitter table) 80% of the annual heating fuel is consumed in the 6 months from November until April.

    It is inevitable that any payment profile deficit at this time of year (with a "spring review") will result in an excessive payment hike of approximately 60% (30% seasonally excess consumption over a 6 month short year). It is a disgrace that the regulator and/or consumer representation is silent on this mathematically proveable outcome.

    The particular case described by the OP is unusual in that in spite of the account already having been subject(able) to an "annual review" (April/May 2011 according to Eon published information) the payment "set" (or allowed) has resulted in a seriously inadequate account balance 6 months down the line. I do not know the reason in this case but I cannot accept that these issues always seem to end up with the customer paying up-front for a process failure not entirely, or not at all, of the customer's making.
    Originally posted by jalexa

    I have looked at this explanation and this one and this one. IMO none of them are right. Neither are they bland or innocuous. Quite the opposite. They are deliberately misleading and have been carefully designed to deceive.

    I agree that it would be impossible for the average customer to know how their DD would be actually administered from the information given.

    The disgrace is that when Ofgem introduce a Standard Licence Condition, some energy suppliers, instead of complying with the letter and spirit of it, prefer to bend, twist, distort and even break them.

    I asked Consumer Focus if they were aware of Eons policy and the problems it was causing some customers. They had not been made aware but promised to make enquiries. Unless customers bring problems to the attention of the appropriate organisations they won't be doing anything to resolve them. Their role is, in the main, reactive not proactive.

    Customer apathy maintains healthy profits for energy suppliers.

    Quite simply if a customer has not had their DD payment scheme fully explained to them by their supplier then the supplier is in breach of their licence conditions.

    If the supplier then attempts to coerce the customer into accepting a DD scheme (that had not been fully explained to the customer) by threats of removing discounts or other sanctions, this needs to be brought to the immediate attention of Consumer Focus and the Energy Ombudsman.

    If the customer has suffered loss as a result, it would be open to them to take any appropriate measures to recover any losses.
    • Mrs Arcanum
    • By Mrs Arcanum 4th Nov 11, 11:24 AM
    • 20,452 Posts
    • 43,922 Thanks
    Mrs Arcanum
    Just been suggested for over 35% increase when I AM 87 IN CREDIT already. Unlike many I prepared for the increase in prices as soon as the rates went up by increasing my DD. I cannot afford sudden ridiculously huge price hikes.

    Even more alarming is were I still to be on my previous DD rate it would be a 65% hike - No way on earth can this be justifiable.

    And for any E-on reps out there - should you take the outrageous amount suggested I will cancel the DD payment.
    Last edited by Mrs Arcanum; 04-11-2011 at 11:28 AM.
    Truth always poses doubts & questions. Only lies are 100% believable, because they don't need to justify reality. - Carlos Ruiz Zafon, The Labyrinth of the Spirits
    • backfoot
    • By backfoot 4th Nov 11, 12:17 PM
    • 2,680 Posts
    • 2,215 Thanks
    backfoot
    Even more alarming is were I still to be on my previous DD rate it would be a 65% hike - No way on earth can this be justifiable.

    And for any E-on reps out there - should you take the outrageous amount suggested I will cancel the DD payment.
    Originally posted by Mrs Arcanum
    You need to formally complain and let Consumer Focus know of the problem as advised by DirectDebacle above. If you cancel they will have unfairly and inappropriately forced you to pay more.

    i.e. the DD discount will be lost.

    This isn't a take it or leave it matter,it is governed by Standard License Conditions which Eon are not abiding by.
    • cherydee
    • By cherydee 5th Nov 11, 12:23 PM
    • 750 Posts
    • 538 Thanks
    cherydee
    I also sent E.ON my meter reading as requested online. I pay by direct debit but if any money is due on the bill I always clear it to start afresh. Sent the meter reading in to them and I was pleased to find I was 260 in credit...I thought to myself I am getting ahead and it was a good start for the winter months. Even now as it is a bit chilly on an evening I will sit with a blanket over me watching TV rather than heating the whole house ....much to my husbands annoyance as he wants the heating on. So shocked to receive a letter days within sending them my reading to find out they are upping my direct debit from 124.00 per month to 155.00.....31 increase, which had me in a state of shock. How am I suppose to find an extra 31 per month .....spoke to someone on the phone but did not get anywhere with getting it reduced.
    • tweets
    • By tweets 5th Nov 11, 12:28 PM
    • 33,584 Posts
    • 445,336 Thanks
    tweets
    Thought i would come on here and put in a good word for EON just got my latest bill and my DD gone down from 61 to 33 thats for both gas electric so i am well chuffed. I was in credit by over nearly 150 on my last bill.
  • jalexa
    shocked to receive a letter days within sending them my reading to find out they are upping my direct debit from 124.00 per month to 155.00.....31 increase, which had me in a state of shock. How am I suppose to find an extra 31 per month .....spoke to someone on the phone but did not get anywhere with getting it reduced.
    Originally posted by cherydee
    Did you ask for an explanation in compliance with "Standard Licence Condition 27.14"? A failure to supply that (on request) would be a Licence breach.

    If you supply the estimated future gas and electricity cost figures provided by Eon, I will calculate whether the increase appears to be accurately calculated in accordance with their own published procedures.

    What was the date of the meter reading that trigerred the hike?
    Last edited by jalexa; 05-11-2011 at 12:51 PM. Reason: date request added
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