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Increased protection against shock bills

Energy regulator Ofgem has proposed a mandatory 12 month limit for suppliers back-billing consumers

unexpected bills

Ofgem expects that by this winter, its new proposals to limit the effects of back-billing will be in place: “suppliers will not be allowed to back-bill customers for energy used more than 12 months ago“.

Concern over current voluntary restrictions

Restrictions that are currently in place work on an opt-in basis, meaning only the suppliers who decide to adhere to a 12 month back-billing limit are doing so — usually larger suppliers.

When the voluntary limit was rolled out in 2007, most suppliers acknowledged the limit in cases where they were at fault, however back then there were only 11 suppliers.

Now with over 50 gas or electricity suppliers in the market, the regulator is becoming anxious:

“Ofgem is now concerned, in part due to receiving case studies from Citizens Advice, that the voluntary principle is not being applied consistently and that not all suppliers have appropriate back-billing protections in place.”

It seems something more substantial has to be done to fully protect consumers from large unexpected bills.

Emma Bush, energy expert at uSwitch, says:

“Putting an end to back-billing on energy used more than a year ago will help protect consumers and encourage suppliers to do more to ensure bills are accurate in the first place.

We would also encourage consumers to do their part by submitting meter readings every three months.”

When does back-billing occur?

Back-billing can happen when suppliers estimate a household’s usage to create its bill: without an accurate meter reading to calculate usage, the supplier is unable to know exactly how much a consumer has used — so could be drastically over / underestimating for months or even years.

In the case of underestimating, when a meter read finally comes in (from the consumer or the supplier) the usage is adjusted, and the next bill could sky rocket to catch up for all the unpaid gas or electricity.

On occasion, system failures from suppliers can also be to blame for a catch-up bill: when the error comes to light (which could be a long way down the line), a large bill can be issued.

Additionally, a consumer may have requested a bill from their supplier on a number of occasions and never received one, yet are still liable to pay for their increasing usage when a bill is finally created.

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Further limits for smart meters

Ofgem has also announced they will look into whether the back-billing for smart meters should be even shorter.

The accuracy of bills is pitched as an advantage of smart meters, so they should ensure that consumers and suppliers are both aware of exactly how much electricity and gas a home with a smart meter has used, putting an end to the problematic estimated bill.

Ofgem summarises: “smart meters enable suppliers to remotely obtain actual, rather than estimated meter readings, which should allow them to reduce the length of time they need to back-bill these customers.”

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  • Mike

    How can the greedy energy companies justify increasing prices whilst the price of oil is pretty stagnat?

  • Dave Dyson

    We are on economy 7 tariff. OVO Energy have swopped round our day and night readings in March,so instead of being £200 in credit,we are £500 in DEBIT. They say the readings have been wrong for years ! No solution suggested yet.

  • Andrew

    All energy companies have increased their prices by at least 50 per cent – 47.7 per cent above inflation. Ofgem’s answer: customers should switch supplier! What is the point of Ofgem?

  • Michael Jackman

    What IS the point of ofgem, it is certainly not to protect consumers from exorbitant price rises!!!

  • Rachel Louise Malynowsky

    Moved from British Gas to Avro energy in Feb as BG couldn’t offer us a better deal, can’t have a smart meter either as have solar panels, so already felt cheated. So switch supplier pay Avro £117 in March & £117 in April (the downside of having an energy switch in a winter month is an average winter usage Direct Debit). Then wham without warning BG hit us with a £126 Gas Bill with Electric still to be confirmed, apparently because Avro haven’t passed on the final reading, why?as we paid them by variable Direct Debit so this very thing didn’t happen…. so now have to chase Avro. So three phone calls at my cost and time, still due a final electric bill. I am hoping that moving to Avro will bring a fresh change to the big six, no tie ins and they will review the DD payment in 3-4 months based on usage. Ps we are still paying £500 off a credit card from 2 past switches which left us with £200 & £300 over spend respectively… Solar panels are our hope of reducing energy bills, I just hope the energy regulator can have influence over accurate and timely billing.

  • Tarryn henson

    We have swapped from N Power to Scottish Power just received a final bill of just under £1000 even though in oct 2016 we were informed we were £2000 in credit with them. They will be receiving my payment of £5 per month as that is the only way I could pay this

  • Dave M

    I am currently in dispute with First Utility as since joining them in 2012 I have been regularly paying the amount that was agreed at the start of the contract. In December 2016 they informed me that my payments were not enough to cover my usage and that I owed them £6000!!! Yes £6 THOUSAND! Although they admitted they had failed to advise me over the course of FOUR YEARS that my payments were insufficient to cover the usage and because they are not part of the ‘back billing rules scheme (they had declined to sign up) I would have to pay.
    Citizens advice are currently negotiating on my behalf. Be warned!!

  • John D

    Cooperative Energy were in a terrible mess with their billing system about 2 years ago and I kept getting inaccurate bills. In the end I changed supplier, and when Cooperative finally sorted out my bills they erroneously credited my bank account rather than debited it with about £200. In all the confusion, I didn’t spot this error. 18 months later they demanded £400 to correct their mistake. A total bunch of cowboys.

  • Dan

    Npower sent me a ‘shock bill’ of nearly £1500, 15 months after a final bill. Thas was for my mothers house who had passed away 2 years prior to the bill and as you can imagine there was no money left in the pot as it had all been dealt with.

    • Dan

      Npower could not tell me why there was a bill this high or where it had come from when I asked them, and there is no way the usage was from the house as it had also been empty for 6 months while my mother was in a hospice but the normal Direct Debit payments were still made so should have been in front.

  • diddly doo

    Don’t think this is new, it applied to bill I received from Npower four years ago

  • Hazel Hay

    I moved energy supplier from Scottish power to eon in October on a fixed rate for 12 months , I have just had a very heated discussion with one of their advisors because they sent me an email to say my direct debit payments would be going up by £42.50 per month due to my bill being higher than anticipated this month, I didn’t think they could change my terms until the 12months was up .

  • Linda Carol

    EDF sent £1300 bill 6 months after we had moved to another supplier and had already paid final bill. Long story but was as a result of them billing us incorrectly for 4 years when we had a meter change – using night rate instead of day for all consumption. Complaint emails back and forth and every one from EDF giving wrong, conflicting and inaccurate info. At 8 week point threatened ombudsman and result – complete bill wiped. Persevere and don’t let these companies get away with it when not your fault.

  • Justine

    Edf sent me my first bill after a year of being there customer an them telling me I wasn’t an evertime I called them they made a new account up for me so my accounts was like spaghetti junction by the time they finished leaving me with a bill over £5000 that they r wanting me to pay that I surly can’t pay an they say because they have took £60 that’s ok for my inconvenience next joke am a single parent with a disable son I can’t swop company’s an I was having it stopped out of my money at on point an they couldn’t find it so stopped it now I can’t have it stopped cos it’s far to much to stop don’t revive that much to cover it EDF is a rubbish supplier an wouldn’t tell anyone to go with them

  • Anthony Chester-McCabe

    Extra energy are still trying to bill me 18 months after I switched to SSE. This is despite me referring them to the ombudsman and them sending me a final bill based on actual readings showing they owe me money! Latest installment in this story is I have just been contacted by a debt collector service! If I were a person that was easily intimidated I would have had a nervous breakdown by now! Do not use extra energy! Anthony Chester-McCabe

  • Dawn Smith

    I have received a bill from EON 2.5 years after moving into my new property. I did not know who my energy company was so after 8 months of no bills went to a comparison site and signed up with First Utility. From Oct 14 I paid First Utility.
    In Dec 2016 I received a bill from EON for £1,300. EON had received notification from Redrow the developer on 7 Dec 2016 that I had moved in on Feb 2014.
    The Ombudsman has found that both EON and myself should have made contact earlier, I don’t know how as I didn’t know they were my supplier and that EON apologise and give me £30 and I have to repay the £1,300!!

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