In the last few years, fines worth millions of pounds have been levied by Ofgem against energy suppliers for issues related to mis-billing (also referred to as "bad billing").
It may not be too surprising, then, to find out that often suppliers send a "back bill" or "catch up" bill when you haven’t been correctly charged for your energy use.
Regulations from Ofgem ban gas and electricity suppliers from charging customers for energy used more than 12 months previous, if the error in billing is the supplier’s. Despite this, it has been reported that some energy companies continue to send bills to former and current customers to recoup on their own internal billing errors.
There are a number of reasons why your supplier could have made errors in your energy billing.
Many households rely on estimated meter readings, instead of providing meter readings to their supplier regularly throughout the year. This can lead to customers underpaying — or even overpaying — to their energy supplier. Poor internal processes could mean these underpayments are left unnoticed for months or years, hence a "back bill".
Usually, the billing errors are related to one-off mistakes specific to the customer’s situation.
For example: Nick notices that his supplier is overcharging him on his direct debit each month, leading to an energy credit of hundreds sitting in his account. He calls customer service to get this energy credit refunded and request his direct debit amount be reviewed.
Unbeknownst to Nick, an internal mistake leads to his direct debit being cancelled entirely.
The cancelled direct debit goes unnoticed by both Nick and the supplier for months — until the supplier picks up on the mistake and sends Nick an energy back bill for all the missed payments at once.
Yet another reason has to do with how suppliers access meter information. Some households are unknowingly being charged under the wrong meter number. A recent investigation from The Telegraph found that due to mistaken data in the national database that links addresses to their corresponding energy meters, some households were being billed for energy usage from another property.
From 2007, Ofgem requirements state that energy suppliers can no longer try to reconcile incorrect domestic energy charges from more than 12 months ago, if the supplier itself is at fault for not billing the household correctly.
This is known as the Back-Billing Principle, and suppliers must adhere to it. It states:
"If your supplier is at fault, it will not seek additional payment for unbilled energy used more than 12 months prior to the error being detected and a corrected bill being issued."
The Ofgem Back-Billing Principle as stated above applies to you and your energy bill if:
Your supplier failed to bill you at all and you have requested bills from them
Your energy supplier billed you using estimated meter readings instead of valid readings provided by you or a meter reader
Your supplier billed you incorrectly by mixing up meter readings, and failed to act upon information available to put this right
Your supplier failed to do anything about a query or fault you have raised regarding your account or meter and subsequently allowed a large debt to build up on your account
Your supplier failed to reassess a payment arrangement (e.g., a request to change your direct debit) within 15 months, or failed to reassess based on a reasonable estimate.
The Back-Billing Principle does NOT apply to you and your bill if:
You have been using the gas or electricity supply but have made no attempt to contact the supplier to arrange payment. This includes moving into a property and making no attempt to let a supplier know you are the new tenant or homeowner
You have wilfully avoided payment
You have not co-operated with attempts to obtain meter readings or resolve queries requested by the supplier. This includes failing to allow access to the property or failing to respond to requests for meter details or meter readings
Your first step if you have been incorrectly back-billed is to contact your energy supplier. You must follow their specific complaints-handling procedure.
If you have done so and still have not had the issue reconciled, you can move to the next step, which is contacting Citizens Advice on 08454 04 05 06 or at their website.
The third step is to enlist the help of the Energy Ombudsman.
There are procedures and rules that apply to when and how you should contact either the ombudsman or Citizens Advice. Read our guide to How to make a complaint about energy for step-by-step info on escalating your energy complaints.
Looking for a cheaper gas or electricity supplier but not sure where to start? Check out our step-by-step guide on how to find a better energy supplier.Learn more