Scottish Power Direct Debit calculations

[2Grumpy]

I get gas & electricity from scottish power, paying by monthly direct debit

 

I have just had an email saying that they have recalculated my monthly payment & will be increasing it from just over £90 to £138. There is no explanation.

 

Naturally, as a trusting person, I emailed back asking for a justification. They replied back with the figures and on analysing them discovered that they were based on

 

• A 6% increase in usage despite using slightly less this year compared to last year
  
• Staying in credit all through next winter so having a zero balance at the end of the winter
  

 

I would have expected the direct debit amount to be based on

My last years usage

Trends in My usage

MY payments not to be used as a free loan but to be in credit after the summer and in debit by the same amount after the winter.

 

OK - I have a debit balance at the end of the winter but I was bothered about that as much as SP were by my credit balance last year. When they recalculated previously, they ignored the credit balance, then set the amount too low after I complained for the second time, but by then I was past caring. That was 3 months ago, I had more than £90 credit, my payments are £30 too low, so they have to go up, it's just a matter of how much by and when to have a zero balance!!

 

My second reply is in the form of a formal complaint demanding an explanation...

 

Given that this is the second time that SP have tried this on, I suspect that this is their policy, and obviously built into their computer programs for recalculating payments

[rebel11]

Hi 2G

 

It normally goes up if you've got an outstanding balance on your account, say over the last three months your direct debit has been set at £80 per month, meter readings have been taken and usage has increased, but thats created a shortfall and the amount of credit on your account is insufficent to cover the quarterly bill.

[2Grumpy]

Agreed, but my complaint is that in the new calculation should they expect a debit balance in March & not plan on increased consumption next year when usage has remained steady or fallen slightly.

 

This is the second time they have over-estimated usage and they do like to keep accounts well in credit

 

What I really objected to was the lack of explanation for the revised figure, hiding their inflated calculation & plan to have a zero balance at the end of the winter rather than having some debit & some credit

[pelham9]

If you forego the convenience and the financial discipline of the direct debit system you will save these hassles and very likely be better off ! The direct debit discount which seems to be a gift is largely illusory.

 

Certainly anyone paying interest on a credit card or overdraft will be better off not accepting the DD discount and insisting that payments are made quarterly in arrears.

 

A large part of the running capital of utilities is financed by the DD system. DD customers make loans to them in the following ways.

 

a) DD plans start in spring before the high useage winter period so the account is in credit continuously. If they find that an account is in debit they will (as you have found) put up the payment amount very smartly. They make it very difficult for you to lower a payment amount.

 

b) They say the payments are set so that there is a zero balance at the end of the year. Tell that to the marines - their systems are programmed to overestimate. When as is usual there is an end year credit they suggest it is carried over to the next year without reducing the payment amount. They make it difficult to get a refund and delay payment of a refund for weeks.

 

c) Outside the direct debit system bills are quarterly in arrears with a two weeks grace for payment. This means that payments are 2 months, 1 month and 0 month each plus 2 weeks in advance every quarter in the direct debit system. In addition customers forego any prompt payment discount if paying by direct debit.

 

Most utilities collect their 'standing charge' by a complicated decreasing block tarriff - a system of charging extra for 'first' or tier one units. For the customer who uses only a small amount during the summer quarters this may mean a saving on the standing charge. The direct debit customer where the account period is annual rather then quarterly cannot benefit from this.

 

Some five years ago after moving house my dual fuel rendered a final bill for over £600 and took it immediately by DD. I reversed this at my bank and the bill was revised down to £32. This experience made me look at the sense of allowing the utilities (or anyone else) freedom to dip into my bank account at will. It also provoked me into doing the sums and I now totally refuse to countenance a utility direct debit plan.

[2Grumpy]

Hi Pelham

 

I always used to pay quarterly in arrears so that might be the way to go.

 

My latest email from SP advises that DD customers do pay in advance and that they enable a balance to be built up before the winter to come back to zero in the spring ...

 

My direct debit has now been set at £131, I would have been happy with £120 - 125.

 

I think that I will enquire about changing my billing method and seeing what discounts I get / lose

[rebel11]

Agreed, there are better ways of doing things, but the only concern for the energy companies is 'profit', the consumer is 'secondary'.

 

Agreed, but my complaint is that in the new calculation should they expect a debit balance in March & not plan on increased consumption next year when usage has remained steady or fallen slightly.

 

This is the second time they have over-estimated usage and they do like to keep accounts well in credit

 

What I really objected to was the lack of explanation for the revised figure, hiding their inflated calculation & plan to have a zero balance at the end of the winter rather than having some debit & some credit

[ScottishPower Company Rep]

Hi 2Grumpy,

 

Sorry to hear that your are having problems, if you PM me with your details I can look at this for you. I work within the escalated complaints team at ScottishPower so will be able to help.

 

Kind regards

 

Graeme @ ScottishPower

[2Grumpy]

Hi 2Grumpy,

 

Sorry to hear that your are having problems, if you PM me with your details I can look at this for you. I work within the escalated complaints team at ScottishPower so will be able to help.

 

Kind regards

 

Graeme @ ScottishPower

 

Hi Graeme

 

Thanks for offering to take a look

 

I have sent a pm

[pelham9]

If you decide to compare the direct debit system with quarterly in arrears do not forget that most utilities allow a prompt payment discount on quarterly arrears payments. I do not know what SP do but EON pays 3% which is half the DD discount so in effect the DD discount is only 3%.

[2Grumpy]

I have had more emails from them. My latest is a new DD of £122 with no explanation (funny that they got mid range of what I would accept)

 

Apparently there is an annual review, but I don't know when that should occur. I would have expected October (when I switched to them) or December (when I switched products), so no comment on when the account should switch from debit to credit

 

I also have 2 accounts, 1 for electricity that is credit after the winter and one for gas that is in debit. I thought that I only had one dual fuel, so they arbitrarily split my payments and assign to different accounts

 

They also didn't comment on my discounts - apparently they got them wrong when calculating my payments in December

 

I have given up (like I did in December) because the DD amount is ok, despite the lack of clarity from them

[ScottishPower Company Rep]

Hi 2Grumpy

 

I am really sorry my response has not fully resolved this for you , can you email me to confirm exactly what information you would like me to provide you and i will get this arranged for you. [email protected]

 

kind regards

Lee-Anne

[2Grumpy]

Hi 2Grumpy

 

I am really sorry my response has not fully resolved this for you , can you email me to confirm exactly what information you would like me to provide you and i will get this arranged for you. [email protected]

 

kind regards

Lee-Anne

Rant living up to my user name on its way.

 

When I worked out how I think SP should have calculated my payments, and what information I was missing, I realised that energy companies aren't really as open as they claim, but I have made a suggestion that might help SP inform & help its customers in the future, however I won't bother looking out for pigs in the sky...

 

I think that customers should be informed!

Edited April 21, 2012 by 2Grumpy

[Bang!]

I think its pretty much just a charging racket across the board with power companies.

 

I had something similar with DD to Scottish Hydro/SSE for dual power (albeit going back a few years ago). They took about £100 a month as they said for the size of house it was unlikely to be much less.

 

However, when buying anything I went for the best power ratings, and had set up a really basic 12v solar/VO powered system that powered the lighting wired for 12v, and charged batteries to be used with an invertor. The computer and monitor which were on most of the time ran from 12v too. The main power usage was the fridge freezer and washing machine and we had no TVs.

 

So the power usage was well under what was billed. Trying to get a rebate from them was a pain, as they did not seem to believe the usage was so low, which was not helped by their not telling specific times the meter would be read - so there was trouble showing it was so low.

 

Anyway - during this period - they then sent a letter saying due to power charges and my usage (which they had no idea of) rising - they would be icreasing the monthly charge to £120!

 

I now pay quarterly upon receipt. You can even balance it out to a fixed quarterly payment by being selective with the readings you submit to them.

[2Grumpy]

I think its pretty much just a charging racket across the board with power companies.

 

I had something similar with DD to Scottish Hydro/SSE for dual power (albeit going back a few years ago). They took about £100 a month as they said for the size of house it was unlikely to be much less.

 

However, when buying anything I went for the best power ratings, and had set up a really basic 12v solar/VO powered system that powered the lighting wired for 12v, and charged batteries to be used with an invertor. The computer and monitor which were on most of the time ran from 12v too. The main power usage was the fridge freezer and washing machine and we had no TVs.

 

So the power usage was well under what was billed. Trying to get a rebate from them was a pain, as they did not seem to believe the usage was so low, which was not helped by their not telling specific times the meter would be read - so there was trouble showing it was so low.

 

Anyway - during this period - they then sent a letter saying due to power charges and my usage (which they had no idea of) rising - they would be icreasing the monthly charge to £120!

 

I now pay quarterly upon receipt. You can even balance it out to a fixed quarterly payment by being selective with the readings you submit to them.

 

I must admit that my experience with SP is better than British Gas who were my previous supplier. They would do their calculations the day before a DD was taken as well as well as using all kinds of excuses for inflating usage, including using "average household usage" one time when they had years of my actual usage.

 

As for refunds, they always want the current meter reading (despite having a reading a week earlier) to ensure that the refund is as low as possible and take ages to send them.

 

A cynical person might suggest that energy companies see inflated direct debits as a free loan (yes, I know that SP offer something if you are over a hundred pounds in credit at your annual review, but after I had been with them over a year I didn't know when my annual review was meant to be. (That's a bit like playing monopoly with the "Go" square hidden))

[nullarborrider]

Now here's a funny thing.

 

I started a fixed price contract with Scottish Power 10/11/11. The contract is called Online Fixed Price Energy December 2012, and the prices are fixed until 30/11/12. At the end of the period, I have the options to move to another Scottish Power product, or to the standard Scottish Power monthly direct debit, or move to another supplier.

 

So six months in, having built up a hefty debit as expected at the end of the Winter period, I get the usual notice that my direct debit is being increased by 60%; no explanation was given, although Ofgem say that the supplier should clearly explain how the increase was calculated. When I queried the increase, I was told the increase was based on a year's estimated usage, ie to April 2013, plus paying off the debit which had accumulated over the last six months.

 

My belief is that since I am on a fixed price, fixed term tariff, Scottish Power can only base my direct debit amount on my account balance and estimated consumption up to the end of the fixed term.

 

Ofgem publish advice on direct debit practices for the Big Six suppliers, effective as at November 2011. This shows that Scottish Power accounts should balance on the anniversary of the start date of the contract.

 

I will start the formal complaint process with Scottish Power immediately, however if anyone has any comments, I would be glad to see them.

 

Thanks for your help!

[2Grumpy]

I'm still waiting for more information from SP regarding how they calculate their payments. I'm still in the position of knowing why, when or by how much SP will next want to change my DD by.

[ScottishPower Company Rep]

Hi nullerborrider, if you would like me to look into this for you please send me a private message or email me at [email protected]

Thanks Lee-Anne @ scottishpower

[2Grumpy]

Another recalculation, another complaint that will be on its way

 

Although the amount of energy they used was fairly close to the actual, it was a bit high, then they rounded up by nearly £2

 

My main issue is that the recalculation was 1 day before the direct debit was due. One day later and the calculation would have produced a lower figure.

 

I have to ask myself if their timing was accidental - but then they know when my DD is due and could take it into account.

 

This is the 3rd time wrong out of 3 - should I be charging SP for checking their routine calculations until they show some commitment to getting it right and to fairness?

 

Complaint would have been on it's way - but their computer said no, they didn't want any complaints at the moment.

[ScottishPower Company Rep]

Hi 2Grumpy,

 

Can you send me the details and I can have a look at your issues.

 

[email protected]

 

 

Thansk

 

Marie@scottishpower

[2Grumpy]

I must admit that my experience with SP is better than British Gas who were my previous supplier. They would do their calculations the day before a DD was taken

 

Just noticed this posting from a few months ago. I hadn't realised that SP would take the worst practice from BG and apply it to their own calculations!

[the venomous bede]

SP are abysmal. I do my account with them by the internet and pay by monthly DD. on 16 October, my annual review came up, and as a result my DD payments were reduced from £96 a month to £56 a month, and I obtained a refund of some £380. They informed me that my next payment, of £56 would be debited on 1 December. Hooray, thought I, a payment holiday in November! Alas, it was not to be, on 1 November they debited my bank account by £ 96. On that day I telephoned and was told my a refund would be made to my bank account within 3 days. It did not arrive in my account. I telephoned again on 7 November, and was told that my "refund had been overlooked" and would be processed within 14 days. A cheque did arrive on 17 November. I have raised a complaint with them as they would have held on to my £96, on top of the £56 a month, giving a payment over a year of some £768 for an estimated usage of £633. There has been no credit to my account for the DD overpayment bonus they trumpet on their website. My complaint was addressed to their CEO, and one of his support team fobbed me off, but I will persevere, if only out of spite!

[ScottishPower Company Rep]

Hi, I am the ScottishPower company rep on this forum. Can you email me the account number or complaint reference please to onlinecomplaints@scottishpower ? regards Gerry