Households complain of excessive hikes to energy direct debits


With colder weather fast approaching and the clocks having just gone back, many will be switching on their heating for the first time in the coming weeks.

But there is already widespread confusion over the gargantuan hikes to gas and electricity bills being pushed through by the energy giants this autumn.

We have heard from scores of customers whose direct debits have been increased aggressively without warning from their supplier.

Pressure: Incorrect energy costs could push millions to the brink, with three in five Britons – 32 million adults – already struggling to keep up with bills

These increases — in some cases worth thousands of pounds — bear no relation to their energy usage.

Then, when customers have tried to challenge these increases, they have faced huge difficulty — with long waits to speak to staff over the phone or an instruction to go online and speak to an automated chatbot instead.

Earlier this year, Ofgem vowed to crack down on energy giants that hiked direct debits excessively.

Last month a new higher price cap came into effect. The average household should now be paying no more than the equivalent of £2,500 a year. 

Plus, they will get a £400 rebate automatically taken off their bills over the winter.

However, we heard from a number of readers whose bills have shot up by more than they were expecting. 

Many are diligently cutting back their usage to combat higher prices, and are worried this is not being reflected in their estimated bills.

But you don’t have to put up with unfair charges. Here, Money Mail explains what is going on — and how you can fight back.

Direct debits that don’t seem fair

Adam O’Connor, 42, says monthly bills have nearly doubled — despite him cutting down on his energy consumption.

In October, the father of four, who lives in a four-bedroom house with his wife and one daughter, used £183.85 according to his smart meter — and his account was £140 in credit. But British Gas raised his direct debit from £190 to £393 a month without warning.

He says he only discovered the jump after checking his online app; and when trying to query the bill, he says he was left on hold for 75 minutes.

Homeowners complain their estimated bills have been completely overbaked after tracking their usage with a smart meter

Homeowners complain their estimated bills have been completely overbaked after tracking their usage with a smart meter

Adam, a fund analyst from Shoeburyness, Essex, says: ‘I explained that I am more than capable of adjusting my direct debit accordingly to make sure I don’t build up arrears. But British Gas weren’t interested.’

After Money Mail intervened, British Gas agreed to put Adam on to a monthly usage plan. This is where you get billed based on the actual energy you have consumed as measured by your meter. This will bring his direct debits back down to £250 a month. He has also been offered a £30 goodwill gesture.

A British Gas spokesman says: ‘We take customer complaints seriously and looked into each case — but we refute the broad claim that we are not communicating with customers about changes to direct debits.

‘Our teams are helping around a million energy customers each month with their bills, Ofgem recently carried out comprehensive compliance reviews; one on whether suppliers were overcharging through the direct debit process and one on supporting customers in payment difficulty – in both reviews we’ve led the sector in the top category with no significant issues being found.’

Billing was the most complained about energy issue in the first three months of this year, according to data from the Energy Ombudsman. 

Dennis Reed, of campaigning body Silver Voices, says: ‘[Excessive bill hikes] is sharp practice by suppliers and shows a disgraceful lack of empathy for millions of households trying to keep their heads above water. 

‘We are calling on the Government to do more to rein in the rapacious energy companies.’

EDF customer John Welton, 71, who is on the firm’s list of vulnerable customers, received a letter saying his direct debit was increasing from £279 to £818 — despite being £1,204 in credit. 

After contacting the firm, a customer service adviser immediately saw it was a mistake, claiming it was a ‘good job’ he had phoned before the first payment was taken. He is deemed vulnerable because he has recently suffered two heart attacks.

John, from Carlisle, Cumbria, wrote: ‘How can energy firms get away with not having a simple check system so that where direct debits are increased by more than 100 pc they are scrutinised before being sent out? Particularly to customers over 60 who are more likely to be vulnerable.’

Joe Malinowski, founder of comparison service The Energy Shop, warns that households might be tempted to accept higher bills because they know wholesale costs have risen substantially. 

He says: ‘It’s important now more than ever that customers keep an eye on their energy usage and really understand what they are being charged for on their bills. Always speak to your supplier if you think your bill is too high.’

We were shocked our bill soared to £7,300 

In limbo: Stephen and Jo Blennerhassett have been waiting for months for the supplier to adjust their bill

In limbo: Stephen and Jo Blennerhassett have been waiting for months for the supplier to adjust their bill 

Stephen and Jo Blennerhassett, both 69, say they’ve been left in the dark by British Gas after receiving a shock bill equal to £7,300 a year, up from £2,200 in 2021.

The pensioners from West Derby, Liverpool, have been waiting for months for the supplier to get to the bottom of the problem.

Stephen says: ‘The frustration is making us ill. I feel like I’m banging my head against the wall.’

The couple, who live in a three-bedroom semi-detached home, say they have checked with neighbours and their bills do not come to a quarter of the eye-watering sum they have been quoted.

British Gas has changed their electricity and gas meters three times. It said the bills were off by 10 per cent — but this still leaves the couple (pictured) with payments of more than £500 a month.

The provider also fitted a smart meter in their home, but Stephen says it has not turned on.

The couple are terrified about how bills could soar even further next year, and are at a loss as to what to do. ‘It’s impossible to get in touch with them,’ says Stephen. ‘We are at our wits’ end.’

British Gas insists the bill it sent to the couple was accurate and is helping them to lower their energy usage.

It has agreed to monitor their modified consumption.

Hit or miss on estimated bills

Suppliers tend to use past energy usage as a gauge for future billing. But this approach is ‘hit or miss’ in terms of providing accurate bills, industry experts warn. It means some customers will lose out.

Energy companies must explain to households how their charges relate to their consumption, according to the watchdog. This is typically done on a bill, or a regular statement if the household pays via direct debit.

Adam O’Connor, for example, found his projected energy usage and initial bill hike to £393 was based on his household’s consumption last year. 

But not only was he with a different supplier, he was also then living with two more young adults in the house.

David Lindores, 70, from Sheffield, says he was horrified to find his bill has increased despite also using less energy.

The pensioner’s energy consumption was superficially high last year because he was living with his sister, who was terminally ill. 

She needed the heating on round the clock to stay warm. Now, he lives alone and, according to his smart meter, his energy usage hovers between £150 and £210 a month. He is also more than £700 in credit.

But he is paying £318 a month to British Gas after it upped his direct debit payments over the summer.

David, who has been a British Gas customer for more than 30 years, says: ‘When I received the bill I nearly passed out with fright. I don’t see how British Gas can justify it.’

The company says its estimated usage for David was accurate, based on last year’s bills. But it has now agreed to switch him to a monthly usage plan and partially refund the credit in his account.

Gareth Kloet, of price comparison site GoCompare, explains that an estimate is a best guess by the supplier as to how much a household might use. 

It can take time for these calculations to match up with your usage if you move home or are switched over from a different supplier — as millions have been this year. 

He says: ‘It can be really hit or miss whether they are going to bill you with any level of accuracy that you’re going to be happy with.

‘The best way to have accurate bills and to stay on top of it is to have a good idea of what you’re consuming, and take regular meter readings and supply them to your energy company.’

He adds that if you get a bill based on an estimate reading, do not hesitate to call your energy company and ask for a replacement based on your actual meter readings.

A British Gas spokesman says: ‘We take customer complaints seriously and looked into each case — but we refute the broad claim that we are not communicating with customers about changes to direct debits.

‘Our teams are helping around a million energy customers each month with their bills.’

Botched estimates: Many households say their bills have soared despite having diligently cut back energy usage to combat the new higher price cap

Botched estimates: Many households say their bills have soared despite having diligently cut back energy usage to combat the new higher price cap

Why hasn’t the watchdog acted?

Earlier this year, energy watchdog Ofgem identified the issue and launched a review.

The regulator’s chief executive Jonathan Brearley said there were ‘troubling signs’ of direct debits being hiked ‘by more than is necessary’, and pledged to fine any offending companies.

Under the Government’s Energy Price Guarantee, the average household should be paying around £2,500 a year for their energy bills.

As part of the crackdown, suppliers were forced to review all direct debits that had increased by 100 per cent or more between February and April.

In July, it reported that ‘no significant issues’ were found at British Gas and EDF. Yet our postbag tells a different story. And campaigners warn that the regulator is not doing enough to keep tabs on the issue.

Matt Copeland, of charity National Energy Action, says: ‘It is concerning that there are reports of suppliers doing this again over winter. 

‘This will have the biggest impact on low-income households who will find it difficult to pay even with accurate direct debits. Suppliers must follow the rules. If not, Ofgem must go further with enforcement.’

Ofgem failed to confirm that suppliers have had to monitor increases since April. A spokesman says: ‘Protecting consumers is our top priority and suppliers must ensure direct debit payments are based on best information about a customer’s actual consumption of gas and electricity. 

‘As energy regulator, we monitor suppliers closely to make sure they are setting these rates fairly.’

Trade association Energy UK says: ‘If customers have any concerns with how their own direct debit has been calculated, they should contact their supplier.’

Left on hold to major suppliers

When landed with such big bills, worried customers typically want to run through the increase on the telephone.

But many say firms are difficult to contact. Money Mail readers have told us they have been left on hold for hours at a time.

Consumer champion Jane Hawkes says: ‘Excessive waits on hold are unacceptable at the best of times, but particularly during the cost-of-living crisis when the biggest worry is increasing energy prices. Companies falling short in this respect need to step up urgently their support provision.’

After our consumer champion Sally Hamilton wrote last week about a British Gas customer who had trouble sorting out a huge bill hike, many fellow customers have got in touch about similar woes.

British Gas says it has invested £25 million and 700 extra staff to improve customer service since last year.

moneymail@dailymail.co.uk

Energy bills: Know your rights 

  • How can people pre-empt a shock rise?

Keep on top of how much energy you are using. Make sure you are submitting regular meter readings — especially if you do not tend to track your usage online.

  • What can I do if my direct debit has risen without my knowledge?

Complain to your supplier if you think your bill is too high. You can ask for credit balances to be returned at any time, and be careful that you are not running into debt. If your provider does not deal with your complaint, you can take it to the Energy Ombudsman.

  • How much notice should I be given if my direct debit is rising?

The watchdog does not specify a notice period for a notification of an increase but says that, typically, ten days’ warning should be given.

  • I have a smart meter. Can I get my energy firm to bill me by usage?

Energy companies are required to offer to provide monthly billing information based on consumption. Ask your supplier.

  • I can’t afford my new direct debit amount — what help is available?

If you are in difficulty, get in touch with your provider. Energy companies must work with you to agree on a payment plan you can afford under Ofgem rules. Many also offer schemes or grants for struggling households.

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