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Energy retailers reject allegations of unjustified increases in direct debits

26 November 2008

The Energy Retail Association has rebuffed claims that suppliers are imposing unjustified increases in monthly direct debit payments for customers in credit.
In a statement, the Association said: "Energy suppliers reject any allegations that they are in any way profiting from direct debit payments. Many people choose to pay by direct debit because of the convenience of budgeting for household bills. The nature of direct debit means that some people will generally overpay in the summer months when consumption is reduced, but this over-payment will be offset against their higher usage in the winter. Customers are advised of over-payments and offered the option of carrying the credit forward to the next bill or being paid back the excess. This decision is one of personal choice."
The BBC claimed a victory for its viewers after Ofgem told Conservative MP and chairman of the Business and Enterprise Select Committee Peter Luff (pictured) it would consider investigating.
Luff took up the case with Ofgem chief executive Alistair Buchanan when he appeared before the business select committee after dozens of Luff's constituents and BBC viewers wrote to complain that their direct debits were rising even though they were in credit.
After the meeting, Buchanan took away the correspondence and promised to review it before launching any formal investigation.
"To date we have no quantified evidence indicating misuse of direct debit schemes. We have not opened an investigation into direct debits but we have received this week correspondence from a number of consumers about direct debit payments and we will consider whether this warrants action by Ofgem or other organisations," the regulator said in a statement.

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