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Energy Companies Banned From Back-Billing Customers

March 5, 2018, 12:00 PM
  • Companies won’t be able to bill customers for energy used more than 12 months ago
  • Back bills can exceed £10,000
  • Rule will come into practice in May
Energy companies won’t be able to charge you for bills more than 12 months old. Image: Getty

Energy companies will soon be banned from back-billing customers for gas and electricity that was used more than 12 months previously.

Ofgem, the energy watchdog, said that billing customers correctly is an essential part of customer service, and large catch-up bills, which have left consumers struggling financially, or in debt to the supplier.

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 is unfair that consumer 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 back-bills 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.”

Many customers could also save by changing energy suppliers, as it was recently found that 40% never look around for better deals, even though it could save over £250 by switching.

Last year, the average back bill that amounted to £1,160, but in some extreme cases, customers faced bills exceeding £10,000.

Back-bills occur when there has been a problem with a supplier’s billing system, or from suppliers estimating bills without using an actual meter reading, which may show the customer’s consumption is higher than expected.

Many suppliers are part of a voluntary agreement not to back-bill customers past 12 months, but this doesn’t include all companies, and those who have signed up do not always stick to it.

The ban will not apply to customers who actively prevent suppliers from taking or receiving accurate meter readings.

But consumers will now not be at fault for failing to provide meter readings.

Ofgem said suppliers will need to assess consumer behaviour on a case by case basis, if it looks like a customer is trying to avoid paying bills by not submitting readings.

The rules will come into effect at the beginning of May.

Lawrence Slade, chief executive of Energy UK, said, “Energy companies take accurate billing very seriously, and where there are problems, the majority are resolved within 24 hours.

“Suppliers are actively working to improve billing for their customers.”

The government has also been working to reduce your energy bills, by introducing a new price cap that could save you £300 a year.

Have you been affected by back bills? Let us know in the comments!

garygemmellover a year ago

As far as i am aware they have never been able to back bill for more than a year if you have a problem with your supply and they havent fixed it in time - I had free electricity for over 5 years - yes 5 YEARS - all because Scottish Power couldnt manage to replace my meter which had stopped working - ie the electricity was ok but the numbers were not moving - I reckon i saved over £10,000 - Scottish Power are quite disgraceful since they were taken over by Iberdrola - I know I used to work in their Cathcart call centre in the IT dept and the Novell Netware migration was a disgrace as are the indian call centres - you wouldnt believe what goes on with your personal details - credit card info etc

I have all the proof - over 100 emails to customer support, over 30 phone calls , referalls to managers and the case closed 5 times without resolving the problem and at a time when I was dealing with my dying mother, my brother ended up losing his sight and i ended up having a nrevous breakdown and was on suicide watch from my doctor - it was completely unacceptable!

tinybabybambyover a year ago

They were able to back bill for a 2 year period up until about 7 years ago & before that it was unlimited. I worked in the debt call centre & you're right about Iberdrola take over, it ruined the company & made staff having to be competitive with their colleagues in order to hit targets. Unpleasant place to work.

garygemmellover a year ago

tinybabybamby Yes but that was if you didnt have a problem with your power i believe - 2 years if there was no problems.

Yes you are right even in the IT dept which was well aware from the call centre area the numpty managers doing the migration wouldnt listen to any of us who actually had the experience of the systems and knowledge to solve problems - unbelievable and its gotten even worse so I hear.

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