Don't give your gas or electricity provider an interest-free loan -- claim your money back, today
If you read my article in March entitled 'Claim Your Cash Back' you may well have been spurred into action. Essentially, the article revealed how irritated I was to discover that by paying inaccurate fixed monthly amounts to my gas and electricity suppliers for over a year I had inadvertently overpaid my providers over £250!
The article gained a lot of interest, with readers emailing and posting details of their own experiences on our boards. Indeed, it seems that quite a few of you agree that this practice is pretty shocking and as one reader, jjokerj, put it "I'm not here to provide you (gas and electricity providers) with an interest-free loan." Too true!
Anyway, I've been doing a little more research on the subject and taken some time to bug my Foolish colleagues about their gas and electricity accounts. So far, I have discovered that I'm certainly not the only one who has paid too much to their suppliers by direct debit (although I have overpaid by the most) as a number of other Fools are owed sums of between £60 and £150.
So what can those of us who pay our utility bills by direct debit do to get our cash back? Simple, just follow these steps:
How To Claim Excess Funds Back
- Check your most recent electricity and gas bills
You'll usually need to have made at least 12 payments to obtain a refund. If you have and your account is in credit...
2. Take a recent electricity and gas reading.
Most suppliers will insist upon this to work out your usage
3. Call your supplier
Armed with this info, give your gas/electricity suppliers a ring. Explain that you have taken recent meter reading(s) and would like to know how much credit you have in your account(s). They should be able to simply re-credit your bank account with the surplus.
4. Adjust your direct debit
Now of course, if you're in credit, you're probably paying too much. Explain to your supplier that you would like your monthly direct debit payment to be adjusted to reflect your real usage.
Wholesale Gas Prices
And of course, this situation will be being exacerbated by the fact that when our utility payments were calculated last year, gas prices were at historically high levels. With wholesale gas prices having now fallen (which should theoretically be reflected in our bills!) even more of us will be paying too much each month -- leaving increasing amounts of our cash to earn interest in our suppliers' accounts.
Other Options
Now, although this practice is extremely common, it's worth pointing out that there are other ways to guard against suppliers hogging our money.
One suggestion on our discussion boards was to claim your excess funds back at a time of year when usage is at its lowest -- such as July/August. Direct debits will be adjusted and all being well, you'll end up owing your supplier money each month (this is a situation that Foolish writer Jane Mack is pleased to be in). You could always opt not to use direct debit -- although you may lose out on a payment discount.
Incidentally, if you haven't changed gas and electricity suppliers for a while, you could find there is more money to be saved here. What's more, don't forget to check out firms such as Ebico, which is a not for profit energy supplier.
If your energy suppliers owe you money, take five minutes to claim it back. It's your money -- so you should be earning the interest on it!