Tired of wasting energy on inaccurate bills?

by , Campaigns Team Energy & Home 26 March 2013
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With so many bills to keep track of every month, perhaps it was inevitable that I would run into a problem. But after an expensive mistake with my energy direct debit, I’ll start watching my bills like a hawk.

Coin on gas flame

Research from uSwitch has found that energy suppliers are one of the biggest culprits for getting bills wrong. And after my week-long wrestle with my own supplier, I can’t say I’m surprised.

Just over seven months ago, I moved into a rented house with my partner. Before we’d even unpacked our boxes, I compared prices to find the cheapest energy supplier, and subsequently switched to EDF Energy.

At the time, our direct debit was inexplicably set at £57 per month. Over the next seven months, we paid our £57 direct debit, building up a total credit of £342.

A series of unwelcome shocks

Then, last month, we found a house we wanted to buy. As we drastically cut back on non-essential spending, I realised we hadn’t received a single bill from EDF yet. As a result, I submitted my meter readings to see if we were in debit.

And boy, were we in debit. Over seven months, we’d managed to rack up a bill that was more than double what we’d paid in direct debits – £425 to be precise. I won’t lie to you, dear reader, I didn’t take the news very well! But this was just shock number one.

We received a warning that our direct debit was going to go up to £208 a month. That’s an increase of £151 per month – or 265%. I got straight on to EDF’s customer service advisers, who told me this amount was to cover our debit plus future usage. However – if I paid the £425 debit, our direct debit amount would be revised.

So, we swallowed the bitter pill and paid the £425 debit in order to make our monthly payments more manageable. But when I contacted EDF again, they told us that the direct debit would stay set at £208. I was gobsmacked. I won’t bore you with the maths, but our energy usage had never come close to £208 a month.

A big waste of energy

After calling again and being told ‘this figure is based on your usage’ – I decided to make a complaint. On dialling the complaints number, I heard a message saying, ‘we’re dealing with a high volume of calls at the moment’ (oh dear). So I hung up and took to Twitter.

After making some noise about it publicly, EDF’s Twitter advisers soon contacted me and asked me to send them an email. Very promptly, I had a call from their complaints department and, as suspected, the £208 was a mistake. Our direct debit was recalculated to £94.

So my story has a happy ending, but not without a great deal of wasted time and unnecessary stress. And it seems I’m not the only one having problems, as our latest research reveals that EDF receives more complaints per 1,000 accounts than any other energy supplier.

Where does your supplier appear in the energy complaints league table? Have you had to deal with any wrong energy bills?

24 comments

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Lee Beaumont

I always take my meter readings on the last day on each month & give them to NPower, Then ask them how much i have used that month. Lets say I used £30 worth. My direct debit is for £27 a month so I would pay the extra £3 there and then via my debit card. I have been working this way for about 3 years now and found it the best way to not get into debt with them.

(I also must admit when i have a problem i do take to Twitter too and it works).

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svendhhh

I used to get readings every time. But in the end I decided it wasn’t worth the extra time and effort, and instead I’m now paying a fixed amount by Direct Debit, and then every year I either get money back or the regular payment goes up. That way I know how much I’ll be paying each month, it spreads the cost out over the year (instead of making the cold months expensive) and I don’t have to worry about getting readings. That said I’ve started doing readings often anyway, just for my own records, so I can see when the usage goes up and down.

Great idea Svendhhh – especially for keeping an eye on your energy usage. I’m all for paying a fixed direct debit – but I do get a bit fed up when I’m overpaying significantly. When you’re in credit with your energy supplier, that’s money that you could instead by earning interest on. That’s why I like the idea of smart meters!

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svendhhh

True about the interest, but look at it this way:

Say you’re £50 in credit averaged over a year (that’s quite high I think).
Say you could make 2% interest if you could invest the money instead (difficult with today’s rates).
That would mean you’d now lost £1 in that year.
However, if you have to get and submit a meter reading, and then make a manual payment every month, that could easily take you up around an hour per year.
That’s not a very good hourly rate for the time spend on this :)

I guess the ideal situation is the one Mr Somedoubts describes, where OVO Energy were paying him interest for the money while he was in credit (not sure if they would also charge interest if you were in debt?). Then you could just set up a massive direct debit, relax, forget about the bills, sit back and watch the money roll in (almost :P ).

Good maths, Svend! And I will reluctantly agree that the actual material loss is likely to be pretty low. However – you mention that £50 credit is fairly high – yet on many occasions, I have been in hundreds of pounds of credit with my supplier. I think OVO Energy’s model of paying interest on credit is a great idea.

I think, if I were honest with myself, it’s more a question of principle than monetary loss/gain. My £50 credit may only be worth £1 in interest to me, but if a supplier has millions of customers, all in £50 credit, the gain to that company could be substantial.

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Martin

I am having the same problem with EDF. The direct debit was set at £105pm and I sent in meter readings after four months of this winter and saw we had got arrears of £225. The average monthly usage for gas and electric was £160 but somehow EDF calculate the monthly usage to be £202pm and have set the new direct debit at this figure – doubling our bill. They work out the monthly usage by adding the arrears to your usage so they double count your bill. I spoke to them offering to pay off the arrears in one go provided they keep the direct debit to around £120 to £130pm. They have refused. They basically want me to pay them £800 by July before they will even consider a review of the direct debit again. This is now subject to a written complaint and I wait to see what rubbish they come up with. It’s outrageous that they demand £800 when going into the summer.

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svendhhh

I had a similar experience with Scottish power. We had been paying £30pm for gas and electricity for a year and ended up about £80 in debt. They then insisted that we started paying £60pm “based on the meter readings we had been submitting”. I tried to convince them that that didn’t make any sense, but they wouldn’t listen. Predictably we ended up massively overpaying, and ended up getting something like £300 back from them at the end of the following year. After that the bill was brought down to a more reasonable £40-ish which seemed to suit our usage.

Hi Martin, this sounds almost exactly the same as my problem. Once I complained, they were happy to help me sort it out. It’s just a shame that it has to come to complaints.

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Chris Gloucester

No one is really being overcharged or undercharged. In reality and in the end you will be paying for what you actually use at the set unit price. Where people get unpleasant surprises is down to not sending in actual meter readings at least every two or three months.
Leave it to your supplier and you’re bound to get over estimated bills and if you let them set your monthly direct debit they are bound to set it on the high side. Money in their account is seen by them as better than money in your’s, who’s ever money it is.

Take control yourself. Send in meter readings at least once a quarter, do the sums and don’t let the supplier dictate the level of monthly direct debit, and you’ll get no surprises.
By taking a closer interest you’ll also very likely see better where you are using more than you need to, cut down on the waste and overall pay out less.

Now some will argue that a smart meter will do all that for you but don’t forget there is the small matter of paying for the roll out of these things through a levy on your bill. You’ll pay your share of the £11 billion roll out cost, and the smart meter itself won’t save you a penny. Rather it will just make life a bit easier for the supplier, give them more control over your supply and all at your expense.

I’ll opt for sending a meter reading every couple of months and negotiating realistic monthly direct debit levels.

Hi Chris, I absolutely agree that submitting my meter readings would be the best way to manage my bills. However, when I spoke to the adviser at EDF, he told me that every time I submitted a meter read, my direct debit would be recalculated – and this can (as you’ve seen) cause problems. Unfortunately, EDF won’t allow you to set your own direct debit – in this case, they only allowed me to have an input after I registered a formal complaint.

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wavechange

e.on was forever saying that they would have to increase my direct debit payment, sometimes even when I was in credit by a substantial amount. Every time I rang them they did take action without much argument, though within a few months we would go through the exercise again. Very irritating but very satisfying that they did respond positively. I just wish I could read my meter and pay for what I use, but I would have had to pay a higher price for energy for this privilege.

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John H

Not always the case. I had a problem where nPower got the night and day meters confused and ended up having to forego some payment because they had taken too long sorting it out.. That was a sweet moment.

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Chris Gloucester

Jennifer,
Well there are other suppliers? EDF is one of the big six and I still have trouble understanding how any of them have any customers at all such is the poor service volatile pricing they all offer. I get my energy from OVO and they will talk to you, prices are very competitive and if you find you have a credit balance they pay you 3% interest.

You say EDF have various rules not allowing you to negotiate direct debit levels and that you only got anywhere by lodging a formal complaint?
I’d say if you have to lodge a formal complaint to get them to discuss an issue you should be thinking hard as to whether it’s a good idea being a customer of their’s at all. You should not have to put up with unreasonable rules they might try to impose.
Don’t mess around with a formal complaints procedure, vote with your feet.

Personally after trying most of them I won’t be going anywhere near any of the big six cartel. They give me the impression they’re doing me some big favor by supplying my energy, and think they can dictate whatever terms they see fit.
Dream on big six, I’m one consumer who won’t put up with it while better service, and usually pricing, is on offer with the smaller outfits.

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mr somedoubts

I am puzzled at some of the low monthly debits some of the correspondents are quoting. I can only assume a. they are hardly at home? b. they thought they had an incredibly (mythical) cheap supplier.Or c. incredibly optimistic ?.If one looks at the Which? website it is awash with articles and research about utilities, that is prices, customer services and considerable differences between how suppliers match up to these parameters. Usually the best deals come from the smaller suppliers.I am with OVO ENERGY having switched from my previous supplier.By and large I find them pretty good they are one of the cheapest per unit, also customer service is good and if you are in credit they pay you 3% interest on your balance.In theory if you are well enough healed you could pay them £999 and get that 3% interest that’s better than most current ISA’s Bills are sent to you every month by email(so clearly access to a computer would be ideal. However you can have paper bill once a quarter but this will cost you-I think £5 per quarter. Oh yes and phoning them is free.Response to calls are good-but not First Direct standard(The Bank). The website is very good and I use this to send my meter readings every month on the day before they calculate my bill for the month-it works well. However we are all victims of rising energy prices no matter how much we try to tweak our usage. Of course sods law has now kicked in we have a double whammy this bloody infernal weather just when we thought we could turn down the thermostat. Final thought they say its much warmer in Australia-just thought?

It’s a good point – and as I said to EDF when I called them, I have to accept some responsibility for not realising that my direct debits were set so unrealistically low. However, their adviser told me that it would’ve been set either based on previous usage (impossible in my case) or based on the size of my house (5 bed) – so something clearly went wrong somewhere.

Australia is a good idea – but not sure they could handle 70 million grumpy Brits who are tired of the weather!

I actually have had a good experience with EDF. When we moved into our new place a year ago we did the Big Switch and EDF was our best deal. So we switched. After a few months we’d built up a bit of credit – about £90 – so they told us they were going to reduce our direct debits down – to £1 a month for while! We then changed tariffs to a longer fix, and our new DD amount is about half what we were paying before. We’re still somewhat in credit, but I’ll wait and see what their review comes up with. We’re due one shortly.

I should point out we’re electricity for everything but heating and hot water (which is a CHP system for our estate), so our usage is fairly consistent. It goes up a bit in the winter when we have the lights on earlier. I did take readings every couple of weeks for the first year, and submitted them online. I know not everyone wants to do that, and we’re lucky our meters are easy to read so it’s not a major hassle.

Of course, should they try and raise our DD they’ll be getting short shrift, as I have a year’s worth of readings plugged into a spreadsheet to tell them why they won’t be doing that. But I’m optimistic to think if they’ve been sensible about this once they’ll do so again!

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John H

My battle with nPower to obtain a clear account-closing statement has included such stupidities as having an untitled item appear on an electricity bill which I later found to be in respect of gas!

Frustration has resulted in my refusal to pay until they provide a clear statement.

Today I have received a simple spreadsheet from them showing all charges an payments (split between fuels) from opening to closing the account..

This could have been made available as normal practice and a curesy to customers.

Everyone closing an account should demand it.

Which? should press all suppliers to have it constantly online on the persoaal page of their websites.

A similar speadsheet for fuel consumption split beween tariffs should also be provided.

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Malcolm R

I have a spreadsheet for my gas and electricity use that calculates my monthly cost – just put in the monthly meter readings. It also compares the previous year’s monthly use. An easy spreadsheet to construct and useful to check whether my direct debit is keeping pace with the costs. Also a good record when choosing the next supplier.
Perhaps Which? could publish instructions on producing one?

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wavechange

A good idea, Malcolm, though most of those likely to make use of this could probably put together their own spreadsheet.

Perhaps the energy companies could provide this sort of facility, automatically inputting the data, so that all people need to log in, which they do anyway if they are running their account online.

Hi Malcolm, that is a good idea. The only problem is that there are thousands of tariffs out there in the energy market at the moment, and they all work in different ways. Taking into account two-tier unit rates, standing charges, direct debit discounts, dual fuel discounts and so on – tariff variation is absolutely enormous.

We’re calling on the government to introduce a single unit to make it easier for people to know how much energy costs, and to be able to compare suppliers. Ofgem has also announced recently that energy suppliers will only be allowed to sell a limited number of tariffs.

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Malcolm R

Jennifer, for monitoring my usage my spreadsheet uses the tariff I have chosen so the multiplicity of other tariffs is not relevant. It currently works with standing charges and single unit prices for gas and electricity, with a direct debit discount at month 12.
I also have a second spreadsheet that I use to evaluate deals when my annual contract is coming up for renewal. This deals quite easily with single unit tariffs, two-tier tariffs and standing charges. Most tariifs fall into these groups so to say tariff variation is enormous is misleading.
The current Ofgem proposals allow choice, and that is what I want as a consumer. It is likely that there will be single unit charges with no standing charge for lower-energy users and single unit charges with a standing charge for medium to higher energy users. No two-tier charges in future. That is simple to understand and evaluate. I choose the one that I predict will give me the least total annual bill – that would be most consumer’s objective I would think.

Apologies Malcolm – I was suggesting that it might be difficult to instruct consumers on how to create their own spreadsheets, considering the variation of tariffs there are on the market. And that’s not just existing tariffs, but thousands of legacy tariffs. If people are willing to make their own spreadsheets, I think it would be a very valuable exercise.

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Alwyn Maynard

I think the answer is to pay a fixed direct debit each month and enter a reading at least once a month, then ring up at the end of each month and pay the difference with a debit card, if it is required.

What people are scared of is overpaying or underpaying and receiving a shock amount further down the line.

Unfortunately, the way some of the energy companies are behaving, they would prefer it if they had access to all of our bank accounts to take as much or as little as they wanted, regardless of how much they guessed we were using, which I think is disgraceful and needs to be stopped.

How dare they take money from our bank accounts with the excuse ‘we’re taking your money we might need for your usage further down the line’. Having them sit on a pile of our cash!

What!!!! Like squirrels storing nuts for winter? How do they even know you’ll be in the same property or even with the same supplier?

That’s like a car repair company charging you for repairs to your car that might be needed in a few years time. Ridiculous!

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TL73

I have to provide monthly readings as part of the tariff I’m on. I get no nasty bills. In fact, a few months back my bills went down as I was paying too much, I got a credit back within days of applying. I still think the bills might go down again in 6 months.

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