Why is my power firm allowed to hold on to £830 of MY money?: Customers who have overpaid huge sums to energy suppliers being held to ransom
Customers who have overpaid huge sums to energy suppliers are being held to ransom; refunds are being delayed for months; many are struggling with fluctuating direct debits; and smart meters remain a big concern. The Mail on Sunday reveals the top energy battles our readers are fighting.
Many customers often overpay suppliers in summer with any built-up credit then put towards higher bills in winter. But The Mail on Sunday has learned of suppliers holding on to staggeringly large sums.
David Barton, 73, a retired school teacher from Lincoln, saw credit steadily build on his account with Avro Energy. Late last year, in sheer frustration, he switched to Utility Warehouse.
Losing out: Many customers often overpay suppliers in summer with any built-up credit then put towards higher bills in winter
He was told by Avro Energy to wait up to six weeks for a final bill and a further ten days for a refund of his £830 credit – the maximum time frame set by energy regulator Ofgem. ‘All grossly unfair,’ he says.
It was only after The Mail on Sunday’s intervention that Avro Energy repaid the £830 sooner. On Friday, it said: ‘The final bill and refund have been completed well within the time limits outlined by Ofgem.’ Another reader, Robert Mabley, from Wadebridge in Cornwall, requested a £200 refund from a £300 credit sitting on his account. But he says the credit then ‘disappeared’ and his monthly direct debit increased from £64 to £73. His repeated requests for an explanation from his supplier have so far gone unanswered.
Other readers have been similarly frustrated. One wrote to say that she is owed nearly £900. She demanded the overpayment be returned but her energy company would only return £230. She was unable to speak to anyone there to pursue the matter and only managed to get £430 refunded in total after a webchat discussion.
Meanwhile, another reader was repaid just half of his £442 credit and was told by his supplier that it could keep up to two months’ worth of direct debit payments as a buffer. He told The Mail on Sunday: ‘If I were a new customer, I wouldn’t be expected to pay two months at the start of my contract as a buffer – why should I now?’
Andrew Long is chief executive of Switchcraft which automatically moves customers on to cheaper gas and electricity tariffs. He says: ‘Energy suppliers love to keep your account in credit and then use your money to run their business.
If you want your credit balance back, suppliers are not allowed to refuse without good reason. But you will need to be insistent. Threatening to switch supplier often helps.’
SWITCHING SITES USE UNFAIR COMPARISONS
Picking a new energy deal is often done via an energy comparison website. Some customers assume they are comparing their current deal with the new ones on the website.
But this is not the case. The potential savings shown are the difference between the new tariff and what you would pay for the next 12 months if you took no action and let your existing deal move on to the expensive ‘default’ standard variable tariff.
This calculation is used industrywide and is set by Ofgem – but not everyone is a fan.
Retired accountant John Chatwin, 74, from Worcestershire, argues that consumers who are proactive enough to compare deals would not move on to their supplier’s standard variable rate.
So the financial benefits from switching are inflated. He says: ‘Switching sites should be discouraged from making inappropriate claims of savings.’
WHY AM I FORCED TO HAVE A SMART METER?
Smart meters automatically send gas and electricity readings to suppliers, so customers don’t have to bother providing details. The plan is for every home to have these meters. Yet not every customer wants one. Suppliers have responded by offering their most competitive tariffs on condition of customers agreeing to have a smart meter installed.
One reader says: ‘I am a widow and a pensioner and at this time of my life do not want a smart meter. Yet because of this wish, my energy company, which I have been with for years, will not allow me to have a cheaper fixed deal tariff.
‘Surely everyone ought to be treated equally?’
VULNERABLE CUSTOMERS ARE BEING NEGLECTED
Patrick Phelan, from Northampton, was forced to seek out a new energy supplier after his existing provider withdrew from the market. But he is now struggling to get meter readings to his new supplier because the device is in an awkward place and he is partially sighted.
Despite being on the ‘priority services register’ – which provides extra help for vulnerable households – the 65-year-old was told he faces a long wait for someone to read it for him, and he cannot book an appointment. He calls it a ‘shambles’.