Almost 1.3 million energy customers have been overcharged in the last year due to supplier mistakes
Households were overcharged by an average of £79 each – a total of £102 million across the country
It took 35 days on average to resolve the issue and get the money back, although 7% still haven’t had a refund
Further mistakes may be going unnoticed with over a quarter of consumers (27%) admitting to not reading their energy bills properly
Uswitch.com is calling for suppliers to dramatically reduce errors, reimburse customers within a month should one occur, and issue clearer bills so customers can easily understand when they are overpaying for their energy.
Almost 1.3 million energy customers have been overcharged a total of £102 million – the equivalent of more than £79 each – as a result of billing errors by energy companies over the last year, according to new research from Uswitch.com,the price comparison and switching service.
Nearly one in three (28%) of those affected said that they were charged for an amount that didn’t match the meter readings they had supplied, while a quarter (26%) said that their bill didn’t add up correctly. Other billing blunders include suppliers getting direct debit amounts wrong (8%), applying incorrect fees (7%), getting tariff or product details wrong (5%) and muddling bills up with someone else’s (5%).
To make matters worse, consumers have then faced lengthy waiting times to resolve the billing blunders. On average, it took those affected 35 days to get a refund, with one in ten (9%) waiting between one and two months to get their money back and almost a third (28%) waiting more than two months to be repaid. A further 7% are yet to receive a refund, 4% are still trying to get the issue resolved and 3% have given up chasing their energy company, saying they never got their money back at all.
The cost of billing errors may be even higher, since over a quarter of consumers (27%) admit to not reading their energy bills at all or just reading how much they have to pay and little else. A fifth (21%) of this group say they don’t read their bills because they don’t understand them. Poor understanding of energy bills leaves consumers at greater risk of not spotting any errors their supplier might have made. As well as missing important information relating to how much they pay, including whether the bill is based on an estimated meter reading, if the account is in credit or whether a cheaper tariff is available.
Claire Osborne, energy expert at Uswitch.com, comments: “Customers having to pay the price for suppliers’ mistakes is unacceptable. Households are already feeling the pinch from recent energy price rises, and having to chase for an average of 35 days to get their money back simply adds insult to injury.
“We want to see companies do much more to make life easier for their customers, accurate bills are the bare minimum they should expect from their energy suppliers.”
Uswitch.com is calling for Ofgem, together with energy suppliers, to improve the design of energy bills and ensure they do more to get the message through to energy customers about what they’re paying. This should boost customers’ understanding of the contents of their bills, and help them to spot supplier mistakes. In addition to explaining how the bill was calculated, energy bills should clearly show:
A clear explanation on whether the bill is estimated or based on actual meter readings
A clear explanation on whether the customer must take any action after receiving the bill
An alert to the customer if they are on a standard variable tariff
A clear and prominent reminder that the customer could save money by switching tariff or supplier
A prominent QR code and clear information on how to use it to get a price comparison
The date when the customer can switch without paying an exit fee.
Find out how you could save over £1,000 a year with Uswitchhere.
Research was conducted by Opinium between 28th April and 3rd May 2017, among 2,008 adults in the UK responsible for paying energy bills.
When asked ‘Thinking about the last time you were charged more than expected for an energy bill, what was the reason?’ 99 people answered ‘The energy company made a mistake’. This as a percentage of the 2,008 people surveyed = 4.9%. This as a percentage of the number of UK energy bill payers (26 million, Ofgem) = 1,281,873 million UK bill payers.
When asked ‘The last time an energy company made a mistake in your bill and therefore overcharged you, how much were you overcharged by compared to what the cost should have been?’ the average amount overcharged was £79 (£79.51). 1,281,8730 x £79.51 = £101,922,798.
When asked ‘Again, the last time an energy company made a mistake and therefore overcharged you, how long did it take from the date that the mistake took place to the date the money was repaid back to you?’ 9% answered ‘one to two months’, 28% answered ‘more than two months’, 3% said they ‘never got the money back’ and 4% said they are ‘still trying to get the issue resolved’. The mean number of days it takes to get money back was 34.9
When asked what they do when they receive a bill from an energy provider, over a quarter (27%) said they only check how much they should pay and little else or don’t read it at all. Out of those who do not read their bills or only check the amount payable, 21% said this was because they don’t understand the information on their bills.
When asked ‘You said the energy company made a mistake. What sort of mistake did they make?’ 28% answered ‘I was charged for an amount that was different to the meter reading I supplied’, 26% answered ‘the bill didn’t add up correctly’, 8% answered ‘the Direct Debit was wrong’, 7% answered ‘an incorrect fee was applied’, 5% answered ‘my bill was muddled up with someone else’s’, 3% answered ‘I was charged twice for the same product’, 2% answered ‘a special offer or discount wasn’t applied’, 5% answered ‘The tariff or product details were wrong’, 8% said they didn’t know or couldn’t remember, and 7% specified another reason.
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Uswitch is the UK’s top comparison website for home services switching. Launched in September 2000, we help consumers save money on their gas, electricity, broadband, mobile, TV, and financial services products and get more of what matters to them. Last year we saved consumers over £373 million on their energy bills alone.
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