Huge numbers of householders are struggling with historic billing horrors relating to their gas and electricity use. Tens of thousands have been left dealing with a mess of inaccurate bills caused by blunders dating back years and with little explanation from their suppliers.
Vulnerable customers, who are least likely to fight their own corner, are among those to have received frighteningly large bills for sums they do not owe.
Relief should soon be at hand from such incompetent account management when new rules come into force in May.
‘Catch-up bills’: In extreme cases, customers have received shock bills in excess of £10,000
Regulator Ofgem has ordered providers to put an end to ‘catch-up bills’ that demand customers pay thousands of pounds for energy used more than 12 months previously.
In extreme cases customers have received shock bills in excess of £10,000. These bills are generated simply because energy providers did not get their figures right first time – and not because customers refused to pay.
LEGACY OF CHAOS
A systems upgrade at Npower and ScottishPower back in 2013 led to billing chaos for hundreds of thousands of customers and ultimately led to the companies being fined £26million and £18million respectively.
With these suppliers working through a big backlog of errors and complaints it means some customers have faced uncertainty and worry for a long time. A proposed merger between Npower and rival SSE next year could spell further billing hell.
A victim of shock historic billing is 85-year-old Davina Cockcroft, whose account was one of many affected by Npower’s billing debacle. It has taken four years to rectify.
In December 2013, she received an electricity bill for nearly £2,000, covering a three- month period of usage at her home in Todmorden, Lancashire. The demand for money ruined Davina’s Christmas because she lived in fear of owing such a huge sum. She considered asking her brother for help but kept quiet because he was recovering from surgery.
A baffling sequence of cancelled and amended bills ensued. Meter readers sent by Npower recorded the day and night-time figures for her Economy 7 meter the wrong way round, leading to miscalculations about what was owed.
Only last year Davina was sent a bill for £1,024 along with 15 other amended bills going back to November 2012. None of the correspondence made sense to her.
Devastated by the experience she turned to her brother, John Cockcroft, for help. But customer service shortfalls drained much of his time and energy, and that of his 45-year-old daughter Claire Scott, who tried to pitch in.
Former engineer and physicist John, 79, says: ‘The complexity and ill-explained calculations on Npower’s amended bills has taxed my powers of comprehension to the limit and is also beyond my sister’s understanding.’
Claire, who is a doctor, says employees were not able to explain how the bills were calculated when asked. She says: ‘When it came to unravelling the billing anomalies Npower was incompetent. Each conversation with customer services, when we requested an explanation of the latest bill, elicited either another revised bill without explanation or an incomprehensible statement of account.’
Spotlight: Our 2016 story about Ofgem’s report into energy complaints
The Cockcrofts still believe Npower is using incorrect figures and have pointed this out to the company, even escalating it to the chief executive’s office, to little effect.
A statement of account shows huge swings between debit and credit, from Davina being in credit by a couple of thousand pounds to owing nearly £25,000. Multiple bills were produced and then quickly cancelled with alarming regularity.
Claire says: ‘My father has always been meticulous with figures and has spent months analysing the bills, cross-checking day and night readings on bills going back to 2012 to get clarity.
‘How Npower dealt with my aunt’s account has been shambolic and heartbreaking to witness. The effect it has had on our entire family is unforgivable. But as we attempt to unpick its errors we are hopeful of preventing other elderly and vulnerable people going through the same ordeal.’
A spokeswoman for Npower says Davina’s account was ‘rebilled’ in 2014 because of the company’s mix-up with meter readings. She was then invoiced incorrectly. The account was only finally brought up to date last year.
However, Npower has refused to increase its compensation of £400 – from which it stingily deducted £31.64 that it calculated was left owing on the account.
The spokeswoman says: ‘We were so sorry to hear of the difficulties Davina and her family have experienced with her energy account. The problem is now sorted.’
But the family are furious about what they feel is a remorseless approach from Npower and they have now contacted the Energy Ombudsman.
John adds: ‘Given the psychological anxiety and distress caused to my sister, Npower’s numerous erroneous calculations, a succession of amended bills – two of them major – and the pantomime of transposed meter readings, I feel the compensation offer of £400 is insulting.’
James Walker, founder of independent consumer help service Resolver, says change is long overdue. Data from the website shows people using the service to air energy-related grievances are far more likely to do so because of billing problems. The ‘vast majority’ relate to legacy bills.
Walker says: ‘Historic bills are almost always a result of miscalculations or complicated tariffs set by the firm. It can be a source of huge distress, especially for older people trying to get by on their own. The system needs to change.’
Ofgem says shock bills are £1,160 on average and can leave people struggling financially
THE NEW RULE
Energy companies will from May be banned from billing customers for energy used more than 12 months ago. For microbusinesses, the ban applies from November this year.
It means that if suppliers fail to provide accurate bills in the given timeframe, they must wipe that portion of debt. Energy regulator Ofgem says shock bills are £1,160 on average and can leave people struggling financially or even in debt. In extreme cases they have exceeded £10,000.
At the moment, a voluntary ban on ‘back-billing’ exists covering all of the largest suppliers. However, Ofgem says not all suppliers are signed up to the code and some fail to meet their commitments anyway.
For example, Npower admits it did not immediately apply the back-billing rule to Davina’s account when it should have, though this was later corrected.
The ban only applies to ‘shock bills’ that arise from a supplier’s erroneous past billing – and not money from over a year ago that the customer already knew they owed.
Protection will not apply if customers actively prevent suppliers from taking or receiving meter readings.
Make sure meter readings are accurate and switch deals if bills are high
- CHECK whether your meter readings have been recorded correctly. Figures may have been swapped around. This is a common problem for those with an Economy 7 meter, which runs two sets of figures – one a day rate, the other a night rate.
- SUPPLY up-to-date meter readings so your bills are based on gas and electricity you have actually used. Otherwise the bill you pay is based on estimated usage.
- SWITCH deals if your bill seems high. You may have rolled on to a standard variable tariff – the default rate customers pay once their initial deal comes to an end. The difference between this type of tariff and a cheaper alternative can be hundreds of pounds a year.
- DISPUTE any sudden demand for payment relating to energy usage from over a year ago. You do not have to wait for the new law to be introduced in May as many suppliers already operate a ‘back-billing’ rule on a voluntary basis, but may have neglected to apply it.
- WRITE an official complaint if your billing errors have not been corrected. Explain how you want the issue to be resolved and allow the supplier eight weeks to get it right.
- REFER your complaint to the Energy Ombudsman if your supplier has not fixed the problem within eight weeks or if it has issued a ‘deadlock’ letter outlining a final position that you disagree with. Visit the website ombudsman-services.org/energy or call 0330 440 1624.
- SEEK help if you are struggling with your bill or need help to make a complaint. You can use consumer help services like Resolver.co.uk or Citizens Advice. Visit citizensadvice.org.uk/energy or call the helpline on 03454 040506.