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Phantom energy bills leave customers facing financial ruin

Patrick Christys
Oct 17, 2019

Energy customers are being hit by phantom bills that leave them facing financial ruin. 

Some firms close down and hand their customer base onto other companies - but suddenly, out of the blue, their previous customers get a letter in the post saying they have an outstanding bill totalling thousands of pounds.

Just take the case of Michael Jennings, who used to be with Extra Energy before it switched to Scottish Power.

He received a letter saying he owed them £2,919.12 - but when he contacted Scottish Power, who took over the customer base from Extra Energy, they confirmed his balance was £0 when he joined.

Nevertheless, the phantom Extra Energy insisted its figures were correct.

“I was told I had three choices: to pay in full immediately, to pay over three months or to await a collection agency,” Mr Jennings says.

“When I requested a bill, the South African operative asked for my first name twice. When I checked the number online I found that it is attributable to a number of scams. I have always paid £80 per month by direct debit and fail to understand how this alleged figure could have been reached in a single month.”

Jennings feared that the demand was an attempt to defraud him and contacted the Observer. Depressingly, it turns out that he is not the victim of a scam, but of a similarly damaging incompetence.

The final statement had been issued by Extra Energy’s administrator, PricewaterhouseCoopers (PwC), although only a paragraph of tiny print on the final statement explains this.

Only when the Observer requested a breakdown of the sum did PwC admit that the debt had accrued due to “a history of under-billing” by Extra Energy, despite regular meter readings having been submitted. When we pointed out that customers can’t be charged for more than 12 months of arrears if they have not been billed, PwC slashed his balance to £1,132.00.

In the wake of Extra Energy’s collapse, its 108,000 domestic customers were promised that they would receive final statements by September 2019, leaving them exposed to shock bills for up to 10 months. To meet that deadline PwC appears to have issued demands without adequate evidence.

Asked by the Observer whether it first checked customers’ billing histories and meter readings, it implied it had inherited a shambles from the defunct supplier. “We have encountered issues with customer data and billing systems that could not have been reasonably foreseen,” it says. “We are in the process of coordinating the complex process of final billing.”

Hundreds more Extra Energy customers have received unexplained three- and four-figure bills months after the company ceased trading and many, who were never customers, claim to have been contacted over phantom debts.

One woman, who had omitted to cancel her direct debit, was left unable to pay her mortgage when £540 was taken from her account seven months after the supplier went into administration. Some have been threatened with debt collectors, while others are still waiting for a credit on their accounts to be refunded.

Utilities regulator Ofgem acknowledges that customers have been poorly treated. “Ofgem’s role is to appoint a supplier of last resort and ensure a smooth customer transfer. We do not appoint the administrator,” it says. “Unfortunately, in the case of Extra Energy customers, we have had to engage very closely with PwC as we are aware of high levels of complaints.

“We’re extremely disappointed that Extra Energy customers have had to wait so long to receive final bills and we are aware of some customers disagreeing with the final amount. We have called on PwC and Scottish Power to work together to resolve this as quickly as possible. We have also been clear that customers with debt should be handled sensitively, and asked that PwC gives due regard to our supply licence rules on debt collection.”

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