Everything you need to know about paying your energy bills by direct debit
Paying for your energy by direct debit can save you hundreds of pounds.
But it is not without its pitfalls.
So we've put together a handy guide to help you get the best out of your relationship with your energy supplier.
What is direct debit?
Direct debit is a payment method that helps you stay on top of your household bills.
Every month, money is lifted from your account automatically, meaning you don’t have to worry about missing a bill.
The amount is based on an estimate of how much energy you use.
Remember, the total you pay may not be the same as the cost.
The company guesses your yearly usage, and spreads it across twelve months.
And it does save you money.
For example, E.ON claims customers are £70 better off annually when they pay by direct debit.
It’s also reassuring because you know how much roughly your bill will be each month.
Often, companies will overestimate how much energy you use, leaving you in CREDIT – excess money you are entitled to claim back.
Are there any problems paying by direct debit?
Many customers feel companies are careless estimating the price – meaning the payment is either too high or too low.
When a rate is too high, you’re left in credit. Check out our tips in section 3 on how to get that money back.
Setting the rate too low is a devious technique, and could mean you get a whopping great bill at the end of the year.
Always provide up-to-date meter readings to avoid your supplier making extreme calculations.
Paying by direct debit means you have to stay on top of your bank account, and make sure there are enough funds to cover the bill every month.
What are your rights?
Condition 27 of Ofgem's Gas Supply Licence says:
* Direct debits must be set fairly and be based on how much energy a customer consumes
* ANY credit the customer has accrued must be refunded upon request
* Suppliers must clearly explain how the direct debit has been calculated
If a supplier makes a change to your direct debit, they MUST tell you at least ten working days before payment.
If they don’t, ring them and demand compensation. It always pays to be vigilant.
A Spokesman Said user Diane told us that Npower raised her bill without telling her.
“Npower put my monthly direct debit up by 120% without informing me. They took the money from my account.
“I want an apology and recompense for the unnecessary stress caused”.
You are also protected under the Direct Debit Guarantee – a scheme run by banks and building societies.
This means that, if there is a billing error, your money should be refunded immediately.
Fighting your corner
If you find yourself in credit, getting your money back can be a struggle.
The refund process varies depending on your supplier, but you ALWAYS have the right to claim back your credit.
All you have to do is provide an up-to-date meter reading.
They may try and persuade you to leave the credit, but don’t back down.
Ask for an explanation and - if you’re not satisfied - politely, but firmly, ask for your money.
Getting what you’re owed can be a nightmare.
We’ve been flooded with complaints from customers who say they have waited months to get their money.
Here’s an example:
73-year-old Richard Ford, from Shillingford St George, was £726.25 in credit when he asked Scottish Power for the money.
“I have been a customer of Scottish Power for over fifteen years and have always been in credit.
“I changed supplier in December 2014 and was owed £726.25. On the 17th December I phoned and asked for a refund. I was told I would get
one in 5-7 working days.
“But over a month later I had heard nothing”.
So Richard posted his complaint on A Spokesman Said.
Ten days later, having struggled for a month, he told us:
“I am pleased to report that I have received my refund of £725.55 in full from Scottish Power.
“Very many thanks to A Spokesman Said. Brilliant result”.
Providing regular meter readings
Sending regular meter readings to your supplier means:
* You can claim back credit instantly
* You are being charged the correct amount
* You can avoid running up large bills
Saving money through direct debit payment
When managed properly, direct debit can be an effective way of saving money, with companies happy to give discounts.
EDF Energy, for example, are currently offering a reduction of 6% to customer paying through direct debit.
And, if you’re unhappy with your payment plan, it’s easy to switch.
Vote with your wallet and find a provider offering a better and fairer rate.
Do you pay for your energy using direct debit? Let us know your experiences in the comments section below.
Or, if you’re having problems with your supplier, get in touch with A Spokesman Said.