Energy bills: suppliers accused of hiking direct debits ‘more than necessary’

Energy firms have been warned about going overboard on direct debit increases.

As we head into winter, our energy use will inevitably start to increase. And while it’s understandable that this increased use will mean higher bills, the scale of the increase some are seeing is already pretty staggering.

The Daily Mail has this week reported on a host of households seeing energy suppliers implement enormous increases to their direct debits.

One for example said that their direct debit had been hiked from £190 to more than £393 a month, without warning. This was despite his account being £140 in credit, while his own smart meter showed that his household had spent less than £185 during the month.

That’s an astonishing jump, particularly when it seems to bear no relationship to his actual energy use. What’s more, it shows that even having a smart meter, and the supposed accuracy that this delivers in tracking your energy use, doesn’t necessarily protect you from unreasonable hikes to your direct debit.

Sadly, it’s not the first time that we have heard about energy suppliers being a little overzealous when it comes to increasing direct debits.

Explain yourselves

Earlier this year Ofgem, the energy regulator, issued compliance reviews to a host of energy suppliers, forcing them to explain why they had increased their direct debits by such big margins.

Jonathan Brearley, the CEO of the regulator, said that he had seen “troubling signs” around the behaviour of energy suppliers when it comes to the setting of direct debits, as well as how suitably they support customers when there are signs of possible vulnerability.

Energy pain on the way

Since those issues were raised, the situation around the pricing of our energy has only become more concerning.

The Government has introduced the Energy Price Guarantee, which locks in the unit cost of gas and electricity, though even the typical household will end up having to pay £2,500 a year based on those prices. 

If your energy usage is therefore at all above that average, then you will end up facing more monumental energy bills.

It’s also worth noting that the guarantee only lasts until April too, meaning that households will almost certainly face further rises from next Spring onwards.

Managing your energy use

Given those pressures, it’s vital that we all take action to keep our energy bills at affordable levels.

There are changes that we can all make, from turning down the thermostat to improving our energy efficiency ‒ that could mean steps like installing a new boiler, insulation or draught excluders.

Fighting back

However, perhaps just as important will be ensuring that energy suppliers don’t get away with ripping you off by hiking your direct debit to unjustifiable levels.

The first step will be contacting your supplier to request a change to your direct debit. Unfortunately this isn’t always easy ‒ depending on the supplier, you may find it difficult to actually get in contact with someone to discuss your situation. 

Check out our run through of the best and worst energy suppliers for customer service.

First and foremost, it’s worth noting that your supplier is required to actually give you notice before increasing your direct debit. At this point you can challenge the supplier, and get them to explain why it’s increasing to that level.

Citizens Advice points out that the supplier is required to give you the meter readings they have used in order to determine what your bill should be, and you can compare them with your previous bill statements to ensure no errors have been made.

One thing to bear in mind is that if you do end up paying more than is strictly necessary for your actual use, you will be able to claim back that money from the supplier. Indeed, as Ofgem points out, you can ask your supplier to refund you a credit balance at any time, with suppliers expected to hand the cash back “promptly, unless they have reasonable grounds not to”.

Of course, if the supplier won’t reduce your direct debit, or is dragging its heels over refunding you an in-credit balance, then don’t be shy about complaining.

If the supplier does not rectify the situation to your satisfaction within eight weeks, then you can take the issue to the Energy Ombudsman. The Ombudsman is an independent arbiter and has the power to force suppliers to put things right, including through the payment of compensation.

The Ombudsman is completely free to use ‒ while you do have to give your supplier the chance to address your complaint first, if they don’t do so properly then it’s well worth making use of the Ombudsman’s services.

It will also be important for Ofgem to step in if it finds that suppliers are in fact going too far in the way that they increase direct debits. A regulator is only effective if it can show its teeth, and keep the firms in its industry under check. Unless energy suppliers believe there will be consequences when they step out of line, they will continue to push their luck.