Save £200 And Get A £200 Rebate From Your Energy Supplier!

Neil Faulkner explains how to save money off your energy bills.

This article was first sent to Fools as part of our 'Afternoon' email campaign.

The Guardian, the Times, and others have reported recently that British Gas is demanding higher payments from both direct-debit and standing-order customers, even if they're in credit.

This isn't new news. Charging people for a lot more than they'll eventually use is common practice for most suppliers. They'll try to get as much money from you in advance as they can, and will repeat that trick every year. They even increase your direct-debit payments in years when they reduce their prices. Hence, many of us are building up hundreds of pounds in credit, giving these conniving companies interest-free loans.

You should always read with cynicism any letters you receive from your supplier. The Times adds that British Gas recently wrote to its customers claiming that the extra payments they demand are for `overdue' monies. Even customers in credit got these letters.

Get £200 back from your supplier

As I wrote two years ago, it seems that lots of us are £200 or more in credit. You can find out if you're one of us, and get your money back, by reading Get An Extra £200 In The Bank! You can also read how to stop your provider whacking up your direct-debit or standing-order payment in future. Read Stop Your Gas Bill From Rising 180%.

Comparing energy regulators in Great Britain, Northern Ireland and the Republic of Ireland

You'd think OFGEM, the British energy regulator, would be cracking down on this devious practice. However, OFGEM told The Guardian:

`To date we have no quantified evidence indicating misuse of direct debit schemes.'

Which means either it hasn't looked into this problem at all (which is probably hasn't) or it hasn't looked into it thoroughly enough. Either way, it's letting us down.

Northern Ireland's regulator, NIAUR, has started to investigate this practice. Interestingly, it seems to have picked up on the problem occurring here in Britain faster than OFGEM. The chief executive of NIAUR, Iain Osborne, recently wrote:

`I see significant scope for controversy on this matter. This scope is fed partly by radio-static from the GB market, where prices are unregulated so unjustified increases in direct debits could boost supplier profits.'

The Republic of Ireland's regulatory body, CER, is more interventionist than OFGEM. It has taken bold steps this month to protect its consumers by telling two suppliers to maintain prices, on average, at the same level or even slightly lower till the end of September 2009.

English, Scottish and Welsh customers, covered by OFGEM, don't benefit from the same sort of strong protection. On the other hand, Britain has more energy suppliers. The idea is that these businesses should compete for customers on an open market and, therefore, keep prices down without rulings from the regulator.

Save another £200!

The thing is, the open market hasn't been working as well as it should, because energy companies simply copy each others' price moves. The market can't work properly until a lot more people start shopping around. Suppliers would then have to reduce prices even further in order to compete.

Most people who look for better deals benefit from what competition there is. Currently, the average estimated saving for users of The Fool's comparison tool is £206. That is excellent. It should be more.

British Fools may not be able to do much to get their regulator to toughen up, but if more of us start looking for better deals, not only will we save money but we'll put greater pressure on suppliers to lower their prices further. We must all use this open market, or we will all keep paying more than we should.

> Compare gas and electricity prices through The Fool.