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Energy firms banned from shock catch-up bill demands

Written by: Paloma Kubiak
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.”

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