Why does my energy company hold onto my money?

by , Senior Advocate Energy & Home 30 June 2011
VN:F [1.9.22_1171]
5 - 0

The other day I got a nice surprise when my energy bill arrived in the post, and found I’m in credit by £100! Great, but if I’m in so much credit, why is my money sitting in my energy company’s bank account?

hands grabbing money shutterstock_1364005

I’m not the only person asking this question. Which?’s executive director, Richard Lloyd, is on Radio 5 Live all week talking about consumer rights, and on Monday a listener raised this precise issue.

Give me my money back!

So what can we do about it? Well I thought that one option would be to phone up the energy company in question and ask them to give it back. It wasn’t that easy.

They explained that the £100 I had in credit was only partly refundable because, although my gas bill was up to date, I hadn’t been billed for electricity since April. Confused? I am.

So I paid £66 on my last bill, submitted two meter readings shortly afterwards and got a statement saying I’m over £100 in credit. Wouldn’t this suggest that I paid too much on my last bill and that, not only should I get a refund, but they should also adjust my direct debit?

Well no, not according to Michael, the customer service rep who explained four times why this wouldn’t happen. I still don’t understand the reasoning. Perhaps it will all become clear when I over pay again in October?

Why’s it so complicated?

But should we really have to go to so much hassle? A colleague of mine at Which? was also in credit a few months back and the energy company simply paid back the amount without him even having to pick up the phone.

I accept that when paying by monthly direct debit, there needs to be a certain amount of flexibility – since you’re likely to be in credit after the warm summer months and in debit after a cold winter. These payments should balance out in the end. And I also accept that it’s our responsibility to make sure our meter readings are correct, by informing our energy provider every three months.

But it looks like energy companies have far too much leeway to arbitrarily decide what their policy is when our accounts are in credit. For instance, British Gas automatically refunds you when your £200 in credit, compared to E.ON which does so when you’re only in £5 credit.

At the end of the day, most of these companies will simply return the money if you ask for it. But should we have to when it’s our money they’re holding on to? After all, what would you prefer; money in your bank account earning you interest, or in your energy companies’ coffers?


Add your comments


Grey Area

Switched to First Utility at the start of this year. They read the meter every month and bill you for what you’ve used. Yes it stings a bit in winter months, but I shall put some money by (oh my God I sound like my Gran) in summer to pay for it. That way it earns money FOR ME until I have to spend it in winter.

Good service from First Utility so far, but I must admit I miss the tracking facility of e-on’s website. It’s a pity they were such money-grubbers.



briy gas refunded me over 3000 pound 18 months ago can they ask for it back ?



Hi my account has been credited by £1188.88 by bt they said my account has been close since jan 2011?? Which I never authorised? Did you have to Pay the money back?


Big Al

I am in credit to the tune of £600 with EDF, and I’m not happy about it. Why the hell are they hanging on to so much of my money, and why am I paying such large monthly payments in the first place?


Big G

Hello Big Al
I have the same problem with npower they have owed me £700 since December last year and after numerous phone call and emails to the complaints dept “they say” it is going to be paid back next week. Watch this space


Old G

I have just receieved £600+ from Npower trouble is it has taken since my first phone call on the 28th Jan to get it back having been told told several times that everything was Ok and my request for the refund was being prossesed only to then find the person who instigated the request on the 28th Jan had used an old process and they would have to come and read my meter.
Over the months I have not been told the truth by at least 3 of the customer service people and one of the complaints team.
They have offered me £50 compensation but they dont get the point about it being my money and the way it was dealt with.


paul buckley

Most companies,including british gas, set their dd by dividing by 11 not 12 as you state in which mag july page 59! This is why most customers in credit!


paul buckley

Please ignore, jst trying to get email updates



Direct Debits.
I believe we should pay for energy in arrears, not finance the energy company.
I agree that Direct Debit is an ideal method of payment for both parties,spreading the annual cost over 12 monthly installments but I object to having this set up by the company in spring each year thus going into credit straight away. The company do give a discount for D/D payment but this is so that they do not have to wait for quarterly billing and it improves their cash flow. If used also as a means of getting operating capital, that is immoral. Thus I will agree a payment in autumn for each year.
I will manage my own financial affairs, they are an energy company, not financial advisers. Perhaps they should be registered with the FSA.



I switched to OVO four months ago. They asked for an increase in my direct debit payments on the basis that March was a winter month and it would be prudent to increase the payments to avoid getting into arrears.
I was happy to accept this dubious reasoning because OVO state they will pay interest at 3% on credit balances. (3% tax free is hard to get elsewhere so why not?).
However as a general precaution I asked OVO for details of how they calculate the interest.
I have not as yet received an answer. I am beginning to have my doubts because the billing statements do not make it easy to establish the credit balance.
The “interest” is applied as a credit to each monthly bill, therefore one’s credit balance could keep increasing unless OVO provide some correction to the Direct Debits they take each month.



British Gas increased my payments without apparently telling me. I noticed when I checked my bank statement. I then check my most recent bill and the change was on that bill, I just hadn’t noticed. Apparently my 12 month deal had come to an end and they had switched me to their basic deal (rather than giving me their best deal!). I researched and I’m in the process of switching. They did ask me why I am leaving, so I told them an email letting me know about the changes and highlighting their other deals might have retained me.



Julian, put a reminder in your phone or on a calendar for 11 months’ time, to remind you to check on your account status. Otherwise they’ll hike the bill up again.

I just assumed, rather stupidly, that everyone in the country paid the same per unit of gas and electric as everyone else. But it ain’t so. Utilities work in the same way that insurance companies work; they make you great offers to get you on board, then fleece you the moment your back is turned. Either they’re losing money in the first instance or ripping you off in the second instance, neither of which enamours you to a company…

You have to play the game. Set your alarm clock to just before your current contract runs out, then threaten to leave…at which point they’ll offer you another amazing discount – same as satellite and cable telly companies, mobile phone companies, car dealers, etc. Not one of them has worked out that if they were honest with their customers they’d stay loyal.



About one month ago, I received an email from OVO informing me of an increase to my direct debit of what I worked out amounted to over 18%. Since like most of your which? members I was fully in credit, and have never been in debit in the 18 months or so I have been with OVO, I immediately wrote back, by post and by email, demonstrating that this unilateral decision was totally unjustified and to revert to the DD payments agreed when I renewed my contract last January. To my satisfaction, they reluctantly agreed.



We pay E.ON £121 a month for our gas. Today they informed us that we were £205 in credit over the past year. They proposed to refund that £205. So far so good but they also proposed to put our monthly direct debit UP to £134.

I rang them and suggested it was illogical to put our payments up if we were in credit over the past year, During the conversation I discovered that our estimated usage was £112 a month. They then very quickly agreed to REDUCE our payment to £112 a month.

They couldn’t explain the original £134 – waffled about “algorithms”. I think they are just trying it on. Only the people who ring up and complain get a reasonable charge. Everyone else pays over the odds.



The surest way to get a refund when in credit is to switch to another supplier! You may well get a better deal too. Works for me!



I am also with First Utility and find the monthly dd of the bill amount very good. Had been with Southern Electric, then British Gas, then Scottish Power who all decided to play ‘fantasy dd’ with my money. On leaving each of the companies I was refunded money. I am much happier paying what I owe, as I am able to budget. First Utility also give me a loyalty bonus and dual fuel bonus which has worked out well for me. A smart meter was fitted last year, so I do not even need to read the meter anymore myself, but I still check it each month. I can only recommend them.



“British Gas automatically refunds you when your £200 in credit” this is not the case three times in the last 18 months I have been over £300 in credit with British Gas and they will not automatically refund, you have to go through the rigmarole of claiming it back. They are not slow to increase monthy direct debits, but the are dead when it comes to reducing them when its obvious your overpaying every month. I took the Which initative, dumped BG went to Saisbury’s who provide me with cheaper fuel that BG can even though they buy their supply from BG…whats all that about.



We left npower on the 20th october and they refuse point blank to refund my £150 that is in credit, they will not reply to online complaints, when i ring they put me on hold then cut me off (3 times)
my husband is 78 and i am disabled, i have tried to tell them this is causing me distress and money problems, they have all the readings ? what can I do ?



npower is now saying the readings are not correct! well done as they took the final reading! still n refund………



nov 29th still no refund may be here in 28 days they say! nobody avaliable to complain to at n power, doubt we will ever get it back,


Rob M

Hi Farnth,

I deal with my 73 year old mum’s finances and I’m having EXACTLY the same problem with NPOWER as you are. They won’t explain why they won’t repay the £200 my mum was in credit on her gas account when she switched suppliers, they won’t answer my online complaints either.

So, I’ve contacted Consumer Direct [their phone number is on the back of your NPOWER bill under the 'impartial advice' heading]. This is ongoing, if they make no progress, I’m going to take it to the ombudsman. NPOWER disgust me, doing this to an OAP in the middle of winter is absolutely disgusting, I am absolutely livid about it, hope you get it sorted soon!


Barbara Stuart

I’m having a similar problem, i have now told them i will charge them £10 per day that they hold on to my money….they say the system cannot generate a final bill, yet when i was still with them they could take my metre readings over the phone and send me a new bill there and then. Hmmm i think they are up to something. I now need legislation to justify my stance so i can also put it in writing and copy in the ombudsman, they told me despite me switching on the 1st Oct they might take up to 30th Jan to resolve it….i smell poo!! If i find legislation to back me up i will let you all know. They guy in the call centre said he had never hear of it, my boyfriend told me to do it. We shall see.
Oh they also took 20mins and 20 secs to answer a call when they automated system told me it would be between 5 and 9 mins.
I might go rant in the money saving expert page,



20th december the refund was eventually issued……………..


teresa gresswell

Am £190.00 in credit from n power for my electricity can I get it back?

Hi Teresa,

Yes you should absolutely be able to get the money back. The best thing to do is call Npower and make them aware that you would like a refund of the credit balance. They should be able to credit the amount to you. They may alternatively offer to reduce your direct debit payments, since having credit on your account when it is well before the cold part of the year suggests you are actually using less energy than your direct debit amounts are budgeted for.



We are with Southern Electric for both Gas & Electric. We have just received an automatic refund of £112 on the electric, the gas, however, is £165 in credit and that is being carried over to our next bill (we can claim it back through an online form though). I just don’t understand why the same energy company has an automatic refund for electric, yet not so for gas. It’s the same company, so why differing rules??



I am trying to leave N Power. I owe them money on my gas account and they have stated clearly they will be deducting it from my account and when BUT they owe me money on my electric account and there is no statement as to what they are doing about that! I have tried repeatedly to ring them and each and every time the message is that there is a 45 minute wait. Yesterday there was at least an option to leave my number for a ring back within 45 mins… guess what? No call back at all… I have just rang customer complaints so let’s see what happens as they say they will get someone to call me back… I AM FURIOUS… However I have yet to hear anything from my new energy supplier Sainsburys so it may get worse!



If I am in credit with my energy supplier and want to switch will I recieve a full refund of that credit, and if so in what form i.e. cheque, payed back into account???



I posted a comment earlier about trying to leave N Power. I finally got through and was told that the credit( what they owed me for electric) has been deducted from the debit ( what I owe them for gas ) and what’s left is what they will take from my account. Apparently in small print this is explained but they ackowledge that it isn’t clear and that many customers had the same problem. Now I have another problem- My new supplier Sainsburys havent been in touch but have apparently already set up a DD and taken money without my agreement for more than I have been paying N Power! When I pointed out to them that they came up cheaper than N Power all they said was that they took this figure from the energy comparison site which I had filled in and not based on any previous consumption! I am so fed up- this should have been easy to do and cost me less and now I am engaged with phone calls and frustration and I am currently worse off! My conclusion is that energy companies are greedy and not consumer friendly! By the way when I rang N power I was suddenly offered a cheaper deal with them!



Almost everyone commenting here seems to misunderstand how averaged-out direct debits are designed to work. It is NOT true that you should expect to be in debit over the winter.

In the “olden days” we all paid our bills quarterly in arrears. The bills were bigger in the winter and smaller in the summer. And they were based on what we had already used (assuming a meter reading was available, otherwise an estimated reading). The monthly DD approach is intended to smooth out the payments, but NOT for the utility companies to LEND us money. Therefore each quarter, your 3 DD payments are designed to build up enough credit to pay off the bill [because it is still all based around the original idea of quarterly bills].

That’s the basic idea. BUT they also want to smooth out the 12 payments over the whole year. So over the summer you build up a credit “nest egg”. Over the winter, you gradually use this up paying your larger bills.

When the DD is correctly calculated, your credit will build up over summer, then dwindle over the winter to about ZERO in spring. Then it will start to build up again. It is NOT designed for the utility companies to lend customers money over the winter (at zero interest) and get repaid over the summer, which is what going into debit would mean. Your bank wouldn’t do this, nor will your power company.

Yes there are benefits to the suppliers to operate this approach. They get your money before the supply the product rather than after. And of course they earn money from it. They don’t pay interest, but they do give discounts. Anyone not liking this system can switch to quarterly bills, and save monthly in a bank account. Then you can decide for yourself how much to set aside each month. Once you look at it this way, the utilities’ approach seems more reasonable.



I’m sorry Nck but you are talking absolute rubbish. The principle of direct debit averaging is certainly OK but the suggestion that we should finance the supply company is nuts. In the old fashioned days, we got all our energy on credit only paying or it when the meter has been read and the bill arrived. The energy companies managed to survive then so why worry about them ‘lending’ us a bit now. I work out an annual cost in Sept/Oct each year, divide by 12 then pay that sum each month by direct debit.
I positively refuse to help finance their business



They divide the estimate by ELEVEN not twelve! Which is why they build up a credit so that you are quite right in saying that we finance them!

However, they do give a discount for payment by DD which probably equals out with low interest rates at the moment.



Sorry to you also Paul. It is your money, your bank account and your decision. You just tell the company what you want and persist until they agree. If they don’t, then switch because at least two others do. That discount for D/D payments is nothing to do with interest. It, because it’s alot cheaper for them to collect that way. Do not finance them in any way, they are aking a mint anywa.



you say eon refund when you are £5 in credit…well ive justhad my winter bill and i am £187 in credit p have a smart metre so my metre readings are bang up to date…wheres my automatic refund



You will need to ask for a refund. Here is what is currently on their website for customers paying by direct debit:

If you’d like a refund, please call us on 0345 052 0000 with your meter readings. This allows us to make sure that your Direct Debit payment is accurate and refund any credit balance that we owe you. If your credit balance is less than £5, we will include this in our calculation for next year’s payment rather than refunding you.


Iona McGettigan

Hi everyone, I’ve been reading your posts and all of you are on DD. I recently had to change my meter in order to change my tarriff from economy 7 to economy 2000 with Scottish power. When the engineer arrived he informed me that I could never possibly have been on economy 7 as I only had a single rate meter!! When I called Scottish Power to confront them they simply said “oh yes so it is” and “We’ll raise an investigation on your account and if your due a refund we’ll get that sorted out”. This was in December. On the 31st of January I received a statement letter telling me I was £501 in credit but no mention of that amount…or any other amount being returned. I called and was told someone would call me within 7 days…..14 days ago. I called again today to be told someone would call in up to 10 days. The thing is, I’m on a pre payment meter so they can’t just adjust my bit or say it’s in safe keeping for winter as I could never be in debt with pre payment. I do certainly get the impression that I’m being fobbed off so if in the likely event that I don’t receive a call should I go straight to the complaints procedure?



Hi, just googled “problem getting credit back from energy company” and this site came up. See I’m not alone! I moved from npower to e.on at the end of November 2012 and got my final bill on 11 December and I am £349.58 in credit. I phoned npower abt 15 December and was told that I would not get credit back for 40 days incase there was a problem with change over to other energy company. Today 3rd March 2013 still no money.



Hi feeder, tell them you are going to the ombudsman I am taking npower to them. You can quote their own terms and conditions at them as well as the utilities act. Even if you didnt transfer you are legally entitled to that money back. Their terms are on the website and you can google the utilities act. Good luck.



I have been told by eon that I cannot have a rebate because I am on pp meter even though I
am 75 pound in credit. is this right?


Matt W

We are experiencing a real billing problem with E.On UK, to make the story brief but to the point, back in February this year we were contacted by them to say that we were in credit by more than £400 pounds on our dual fuel account and that they were refunding us Great …….we thought!!! but just last week we were informed (almost 3 months later) that this was a mistake and we now owed them £747.76!!!! when I asked them why we had arrived at this figure I was informed by their team manager that they had not been billing us enough since 2011 !!!!. They now expect us to catch up and pay this balance back along with an increased dd of £105.00 and with the added amount bringing our monthly payment to £160.00, they have offered to pay £80.00 towards the high balance as a gesture of goodwill !!!! absolute toilet!!! I am so angry about this, why should I be made to pay for their mistakes, I just cannot afford it, is there anyone in this forum who has had a situation like this, fought it and won?? I am seriously considering writing to my local MP about this. Can anyone advise. Many thanks



Hi Matt, Have you checked your bills against the meter readings.. It’s a bit laborious but you can check whether Eon’s sums are correct. They obviously boobed in offering the refund but if you have been underpaying, for whatever reason, then you do owe the money. Their offer of £80 is an admission that they made an error in suggesting a refund. I left Eon for a cheaper tariff but found them OK once you get through to management or the COMPLAINTS section.


steve wright

I’ve had the same problem with scottish power, I only found out they owed more than £700 when i rented my flat out and closed my account, they are refunding the money, but it will take two weeks to get a cheque, why they cant transfer the money directly they wouldn’t say, only that they cant!


b rian

read your articals,and find it disgusting,how mainly large companies,can abuse the trust of their customers We recently moved house ,and as asked ,by npower , we took meter readings,which we did , The final bill came a few weeks later,Gas and electricity were payed as dual fuel by direct debit ,They said that they had only worked out half. of the bill ,when the other part had been worked out ,we would be reimbursed,we were in credit over £1000,that was in November 2012,after phoning and writing to npower on a number of occasions,all we have had is a lot of apologys,a lot of promises and nothing more,at what stage does a company get fin ed for keeping other peoples money under false prentenses,npower do the decent thing and give us what is ours.


Phil B

rant time,

I changed supplier on the 29th May, gave them my meter readings and sat back waiting as you do for the payments to change. I was unable to halt the last payment to my old supplier N POWER on 3rd June, so I rang them to say that I was paying two suppliers. I was told that I should cancel my SO with the bank, and they had been notified I was changing supplier.

Two days later I received an email asking why I had cancelled the SO, I rang them to explain and was offered a new ( much cheaper ) deal. I declined.

My new supplier is 39% cheaper for the same fuel usage over a year,

On the 13th June I rang again re the final bill, their estimated records show I was £200 in credit. i was told that they didn’t have the meter readings from the new supplier. I checked that the new supplier had submitted them and rang N Power back. I complained and was told my problem would be resolved in 40 days. Beware if complaining to get a complaint no as I found later that this had not been recorded as a complaint, which extends the time before a complaint to the ombudsman can be made.

On the 13th July, I rang back to see how things were progressing and was informed that there were still no meter readings. I made a complaint and this time was given a number

On the 17th I received an e mail from them stating that my account records had been corrected to include my correct name. it had never been wrong. I rang them back to complain again and was told it would be dealt with, 2 days later I received a letter saying the problem would take up to 28 days to resolve.

On the 23rd July I rang and was at first told that my gas had been cancelled but they were still supplying electricity. I questioned this and was told that was wrong. there is I am now told a block on payment to me from the company. ?????? I was told that the problem had been passed to the complaints dept. i asked for a manager or someone else to ring me back with a better answer, but no one did.

Today, the 24th I have contacted the complaints dept, 27 mins wait to get on. The person I spoke to blatantly lied, he verified my accounts details and never stated he was from the complaints dept. he started to talk about the account and how could he help. I tod him I had a complaints no and he said ” I ca… er yes please.” otherwise he could see this on his screen. I asked why there was a payment block on my account and was told that there was an IT problem ( at this point I was half way between laughing and getting angry) the problem had been passed to the IT dept and they would deal. He refused to transfer me to the IT dept as they don’t take calls: he could not give me a time scale for the problem to be solved: he refused to pass me onto a manager as She couldnt do any more than I can: he refused to pass me to any other person who could help or anyone in any position of authority. At this point he admitted he was from the complaints dept.

When I made the statement ” So you are telling me that it is your IT problem that is at fault, you cannot tell me when it will be solved and I will just have to wait even if it takes months” his reply was Yes.

Oh 10 minutes after I put the phone down after telling him that their service was bordering on incompetence or fraudulent I received an email asking for customer service feedback.

I did laugh at that one.

Appolgies for typos, and rant, spleen vented.



Npower are the same. I am £364.72 in advance and they still wont refund any more than £140.00. They say it is to cover winter fuel but this happened last year and the year before. We should have the interest they are making put into our accounts.


Andy D

Same story from Co-op energy. Needing to retain annual overpayment of £160+ and only refunding me £90. Only getting this because I’ve asked. It seems to be quite cynical for them to be pretending it is in my best interests.I agree with previous post about interest being due to us and not retained by the CO-op.

Is there an energy regulator!?



There is a regulator called Ofgem but don’t hold your breath, they don’t like getting involved in individual cases. Actually, I find their statements so full of words that I rarely get to the end without dropping off to sleep.
I now make sure that I do not get into credit by agreeing a monthly debit payment based on annual consumption. I can also tell my bank to cancel the direct debit if the energy company start playing tricks



Left First Utility on 31st May , £300 in credit trying to get it back is a nightmare .First Utility staff mislead you ,promise money returned in 7 days ,it never happens .
They have taken a payment 2 weeks after our contract ended even though we were in enough credit to settle all bills.
Every time I phone or email I get the same …” Your Final Bill has not been done yet ”
3 months after finishing with them ,no final bill , it is a joke .
Do not believe anything you are told by this company they lie to you.
It looks like Legal Action is the only way to get your credit back , they are cheats keep well away from them.


Julian Pellatt

My stepfather died in October 2012 leaving a credit balance of c.£540 on his NPower gas/electricity account. Nearly a year later NPower still has not paid back this balance, even though the account has been fully closed. Their customer service is appalling and my letters and emails are completely ignored. I have have phoned their dreadful call centre many times over the past year – at times I have had to wait for over 30 minutes to be answered. I have referred my complaint to the Ombudsman, and I shall await the outcome of their involvement. NPower’s actions in failing to refund credit balances in effect amounts to theft. NPower is an utter disgrace. There is zero accountability as it is a faceless organisation whose senior management is hidden behind walls of opaque screens of one kind or another.



I left Scottish Power in November to go for a better deal with nPower. There is a £500 credit on my account which I am still waiting for a refund. The customer service rep just kept talking to me on a loop telling me it takes up to 30 working days for the meter readings to be applied to my account!! Before they would refund any credit. Now counting the days, thanks for nothing Scottish Power


s mutch

having same problem with npower left them in november had final electric bill 260 pounds credit they wont give me a final gass bill or total final bill i have asked loads of times for final bill but carnt get one so i asked for the 260 credit to be paid but they say they wont pay anything untill the final bill is sent. what a joke stay clear of npower



Our DD shot up from £50 per month to £160 in Jan 2011, we didnt really question it at the time as we thought it will rectify itself once we give an actual reading, anyway 3YEARS passed before we got round to sorting this (very lazy) and we went to the metre to get an actual reading but the digital meter wasnt working. We got a new metre fitted and then after a short while gave them a reading which they then averaged out over the last 3yrs. Turns out they was estimating we was using 29kw of electricity per day but infact we are using 12 kw. i have calculated what they owe us and it is just over £3000. they took a week to fix the problem and tried palming us off with a credit of £400, obviously i complained at which point they then came back with £1950. Obviously i have complained once again. they are now saying it will take a further 2 weeks to look into this manually and i am not guarenteed the £1950 (trying to bully me to accept it). Anyone experienced anything like this before that can offer any advice? Thank you in advance.

Back to top

Post a Comment

Commenting guidelines

Your email is never published nor shared. Required fields are marked

Tired of typing your name and email? Why not register.

Register or Log in

Browse by Category

Consumer Rights

711 Conversations

8645 Participants


Energy & Home

594 Conversations

6426 Participants



760 Conversations

5567 Participants



730 Conversations

6751 Participants


Transport & Travel

566 Conversations

4331 Participants