Why does my energy company hold onto my money?

by , Senior Advocate Energy & Home 30 June 2011
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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?

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Charlie

I recently, a couple of months ago, switched away from First Utility. I informed them before I switched, via their website, and asked them to refund the nearly £200 pound I was in credit.
Did I get my money back? No, in fact they continued to bill me for a further 6 weeks when I was nolonger their customer!

I phoned them to ask what was going on and why they had not refunded MY money. I was unbelievably told that they could not refund the money straight away due to a fault with their system. Presumably the same problem they had in June 2013 when other customers were complaining that they didn’t get their money for 3 months.

It is surely not acceptable that First Utility appears to have a policy of keeping money from their customers for a number of months after they have left. To me this can only be so that they can earn interest on the money that they keep in their corporate bank account.

They are not doing themselves any favours by adopting this policy as I, and I sure other ex-customers, will be letting everyone know what they do.

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john wiggins

whatever you do stay away from this company full of excuses but very little action, left after very poor service no bills for 7 months then left for weeks waiting for my £200+credit refund, very bad company.

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derek shawcross

i have been fighting british gas now for eight years yes eight year for money they owe me witch is £3066,33p they tell me it will go in my bank but never does now after eight years of phone calls and hundreds of pounds later i,m still not got it, i told them i won,t interest on it as they would if it was me,i have a letter of them admitting they owe me but getting it well yes i am still waiting, the phone calls can last up to one hour plus times that by eight years it,s a lot of my time and money,

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Vince

I am having similar problems with being billed for a meter that doesn’t exist by Spark Energy. @Derek Shawcross, go to the ombudsman ASAP, that is far too much money to me missing!

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