I have emailed my MP about the DD above bill problem, the reality is no account holder should have a credit balance. Get rid of credit balances (unless its from something like a WHD payment and only temporary until taken by bills). Without this happening then when a company liquidates, the receiving company doesnt need to honour credit balances, and then there doesnt as a consequence of that need to be a recovery via higher bills.
Soldato
So what happens when a supplier goes bust in say October when everyone on a fixed direct debit has built up a credit balance over the summer to cover their winter usage? "Sorry suckers, I know you've already paid for a lot of your usage for the next few months, but now you have to pay it again to your new supplier".
Your use of the phrase "in reality" is interesting, since this would never work in reality (unless you want to go back to the days of receiving a bill every quarter and then sending off a cheque to cover it, which let's face it, is more inconvenient for everyone and a lot more expensive to administer)
Man of Honour
There shouldn't be any credit balances in my opinion. Why can't they bill us for the energy we have actually used instead of a fixed direct debit all year round? If the likes of telecomms companies can do it why can't energy companies?
Associate
HEAR HEAR!!!
Soldato
Possibly because some like to have a fixed amount per month for budget reasons?
Not everyone wants mega high outgoings over winter then lower over summer. Its easier to mange when it's a set cost every month
Not everyone wants mega high outgoings over winter then lower over summer. Its easier to mange when it's a set cost every month
Generally people also don’t take regular meter readings and lots of people also refuse smart meters. Lots of places also don’t have smart gas meters because they can’t be deployed where the meter is and that brings you back to the first point.
Interestingly Eon haven’t upped by direct debit despite me getting an electric car and upping my usage considerably. I think I’m about £80 down at the moment, I guess I’ll make that up again as we get into spring and it warms up a bit.
Interestingly Eon haven’t upped by direct debit despite me getting an electric car and upping my usage considerably. I think I’m about £80 down at the moment, I guess I’ll make that up again as we get into spring and it warms up a bit.
Associate
The option would be nice, then
Fixed direct debit's is what would be scrapped, thats the point of what I said, the direct debit would be variable to match the bill. So no one would have a credit built up. You would pay more in winter, less in summer.
And what capital would providers use to pre buy energy?
What a daft letter. Bet it was lolled into the bin. I'm paying like 8 quid for the credit balance insurance which seems like a system that works to me.
Traditionally people on credit accounts "pay after" they use the energy. This system of having credit built up so the energy supplier is holding on to your money that has changed in the industry,
You are defending this broken system where people can have several hundred pounds of credit for bills they not got yet and then when company goes bust the lost credit has to be covered by everyone else?
Before direct debit became popular, you would ring up and pay your quarterly bill when it came in or send cheque in the post or something. What should have taken over that is simply automating that payment, not this silly fixed payment system. Which tends to lead to people either under paying or overpaying.
What other consumer service that isnt a unlimited use type product has the same type of billing?
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Soldato
This was one feature that made the smart meter valid. Energy companies could say you owe us X as they could read it live. However we know how well the roll out has gone.
Whilst we are at credit discussion, it should also work the other way where your paying a tariff based on variable prices. Why lock people in to one supplier when you should be able to nominate a broker that does the work, you pay them and its down to them to get you the cheaper rates on a daily basis. Probably too much to ask but we all know its doable.
Whilst we are at credit discussion, it should also work the other way where your paying a tariff based on variable prices. Why lock people in to one supplier when you should be able to nominate a broker that does the work, you pay them and its down to them to get you the cheaper rates on a daily basis. Probably too much to ask but we all know its doable.
Soldato
But I personally don't want that. During the winter months, if I was actually billed what I used then my fixed wages wouldn't be enough to cover the payments.
Having it spread out fixed over 12 months makes it easier for me to manage.
Soldato
Well I dont know what to say for that, to me the whole thing just seems broken, for me a perfect solution would be the default payment method would be DD covers the bill, there could be a cap set so DD wouldnt exceed a certain amount in case a shock bill comes in, and you would have to arrange how to get it paid with supplier, if high payments are the concern. So something like this, your DD covers bill, if bill is higher then cap, your account in debit (new system would allow debit, just not credit, like a credit card) and then you either make extra one off payment to clear the debit or DD is increased over bill £xx month until its cleared. This would at least smooth the hills.
You couldnt set more money aside for the higher bills in winter the same way do for Christmas?
Bear in mind for me, I have seen how broken it is, my account has been in credit all year round for several years, it peaked at around £900 last month in the middle of winter. Many other reports as well across the internet from other people of the same issue. companies treating customers as ATM's.
Interesting so they not just taking it off the bill, but instead sending a £150 refund.
Soldato
I hope it can help some people here https://www.gov.uk/government/news/households-urged-to-get-ready-for-150-council-tax-rebate
So what happens when a household on low income gets landed a £400+ energy bill in January/February because they haven’t built up credit over the summer?
I already replied on that, the DD's get increased after the bill to pay it off (if the bill is above DD cap set), its basically the same thing, except you pay extra "after" the bill instead of "before" it. Debit balances would be allowed but not credit.
And the £400 would be divided over half the amount of time, meaning the bills are very high.
Your approach makes sense if you have sufficient buffer in your current account. The poorest do not*.