You are here: Home - Household Bills - News -

Energy firms banned from shock catch-up bill demands

0
Written by: Paloma Kubiak
05/03/2018
Suppliers will be banned from backbilling customers for energy used more than 12 months ago, the regulator has announced.

From May, energy providers will no longer be able to demand ‘catch-up bills’ for energy used beyond 12 month ago.

These shock bills are typically £1,160 which can leave households struggling financially or even falling in to debt.

However in extreme cases, customers have been backbilled by as much as £10,000.

Regulator, Ofgem said these catch up bills arise when suppliers face issues with their billing system or from estimated bills rather than actual meter readings showing households use much more than expected.

Currently many suppliers have signed up to a voluntary agreement not to backbill customers after 12 months but this doesn’t cover all firms and Ofgem said those that have signed up don’t always follow this agreement.

As such, Ofgem will ban all domestic suppliers from this practice from the beginning of May, apart from where households actively prevent suppliers from taking or receiving accurate meter readings.

Rob Salter-Church, Ofgem’s interim senior partner for consumers and competition, said: “Large catch-up bills can leave consumers struggling financially or even in debt to their supplier.

“Getting billing right is an essential part of customer service, and it’s unfair that consumers should be left out of pocket when through no fault of their own they’re issued with a shock bill from their supplier.

“So we’re taking action and banning suppliers from issuing backbills beyond 12 months, where it’s not the customer’s fault. This sends a strong message to suppliers to improve the accuracy of the bills they send to their customers.”

‘Backbilling avalanche’

Peter Earl, head of energy at Comparethemarket, said while the ban will give peace of mind for many households from May, until that point, there is a chance we could see an avalanche of backbilling from energy companies trying to recoup as much money as they can before the deadline.

“Given how confusing and error-prone bills can often be, there may be a lot of heated disputes between suppliers and households before May.

“Bill payers should know that they are not alone. If you feel your energy company is not dealing with your billing complaint appropriately, you can take your case further and complain to the Energy Ombudsman, who will independently handle your dispute.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
book
Stock of the week: Relx

Graham Spooner, investment research analyst at The Share Centre, picks analytics and information provider Relx as stock of the week.

Close