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Tips to avoid being overcharged by your energy supplier

Tips to avoid being overcharged by your energy supplier

Have you ever been overcharged for your energy? Need help understanding your energy bills?

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If you think you’re being overcharged by your supplier, you’re not alone. Trouble is, how can you tell? Well, there are a number of things you can do to be avoid being overcharged.

Tip #1: Read your energy meter

The simplest way to avoid being overcharged by your supplier is to make sure you give them absolutely no reason to estimate.

Estimating your energy bills gives suppliers every incentive to overcharge you — and even charge you in advance for energy you haven't yet used — to ensure you don't fall behind on your payments. After all, if you were an energy supplier would you underestimate how much a customer was using?

Luckily, stopping estimated billing is as easy as reading your meter regularly and updating your supplier. Too many of us only ever submit meter readings when we move into or leave a property, but it is far better to submit at least four meter readings over the course of a year – about one every three months.

For standard meters, just read the numbers on your meter, noting down all numbers except those highlighted in red or after the decimal point, and record the date.

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Submitting your reading varies from supplier to supplier, but most of the big suppliers including British Gas, EON Energy, EDF and npower, let you submit your meter readings online or using smart phone apps, making it easier than ever.

Those already using smart meters, such as some First Utility, EDF and British Gas customers, don't have to worry about estimated billing as the energy supplier can track your exact usage and bill accordingly.

Smart meters are being rolled out from 2014 onwards nationwide, so in future bill estimation should be a thing of the past.

If you are not sure whether your supplier uses estimated billing, just look for the word 'estimated' on your bill, or call your supplier.

Tip #2 Just say no to exit fees

Falling victim to the dreaded exit fee is one sure way to end up paying too much for your energy.

Exit fees are used by energy suppliers to ensure you stay with them for a fixed duration — just like a penalty fee on a mortgage. They are often — but not always — applied to fixed rate tariffs, where you receive a fixed rate for a given period of time.

However, exit fees may also apply to variable tariffs, so make sure you read the fine print before signing up to a new deal.

Exit fees allow suppliers to guarantee a fixed number of customers for the duration of a plan, so they can calculate how much to charge on that plan to make it both competitive and profitable. However, exit fees limit your options when it comes to switching away, particularly during a price cut.

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uSwitch will list the exit fee (also referred to as a cancellation fee) in the plan details section of your comparison results, so you should calculate this cost in when considering whether to switch.

For example, if you have two fixed plans side-by-side and one has an exit fee, the plan without an exit fee may be a better bet over the long-term, even if it is more expensive now.

It is worth noting that energy companies are not allowed to charge you exit fees or any other financial penalty in the event of a price increase. If your supplier tries to charge a fee or, if you want to move supplier, charge you at the new higher rate until you have switched, you should complain.

Tip #3 Comparison shop … often

Another sure way to be overcharged for your energy is to avoid shopping around and switching.

Energy suppliers rely to a large degree on customers who don't search the markets for cheaper deals, even though their prices are going up. Two identical homes, using identical energy, can easily be paying very different amounts for their energy due to the supplier they are with, or the tariff or plan they are on.

One of the biggest culprits of overcharging are so-called 'standard' plans, or your supplier’s basic plan. These often cost significantly more than other plans like dual-fuel or online, and too many suppliers will put you on a basic plan by default.

If you're not sure whether you are on a standard plan, just ask yourself when was the last time you switched. If it was more than two years ago — or you never have — there is a very good chance you are on a basic plan.

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Tip #4 Don’t put off switching

Shockingly, the latest figures show that just four in 10 of us have ever switched energy.

Too many consumers think of switching energy supplier as a difficult and lengthy process that will end up costing us more, but that isn't the case.

In fact, 85% of those who did switch energy reported finding the process easy. So why don’t more people switch?

A recent independent survey commissioned by uSwitch tried to get to the bottom of 'the switching state of mind', and found that many people still believed the 'myths' about switching energy, such as being charged twice or having to have your meter replaced.

The truth is, all you need to switch your energy is a copy of your latest bill and your postcode. If you want to get the most accurate comparison possible, try to identify your annual consumption in kWh. This should be on your bill, but can sometimes be tricky to find. For help deciphering your bill, see our guide to understanding your energy bill.

Tip #5 Complain, especially if you get a big bill

If you feel your energy supplier is overcharging you — if you receive a particularly large bill after a price rise or a large estimated bill — you should contact your supplier to ask about it.

Your supplier is obliged to treat your complaint fairly by the energy regulator Ofgem, but if you are still getting nowhere don't give up. If you don't get a response within eight weeks you can take your complaint to the Energy Ombudsman, which will look into your dispute. For more about this, see our guide on how to handle complaints about your energy supplier.

Follow this advice, and you should never be overcharged for your energy again. With prices higher than ever, it pays to make sure you are getting the best deal on energy.

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