My hon. Friend is absolutely right. It gives me absolutely no pleasure to say this, but the point that he makes underlines the fact that in certain parts of this industry, these companies are behaving like it is the wild west. Almost anything goes; almost anything is okay for them to get away with regarding customer service, accuracy and the errors that they make. By the way, undercharging is not uncommon. It is something that constituents have brought to me. People suddenly finding that they have been undercharged is also an issue and it is just as unfair. However, I want to get back to the main thrust of the debate, which is the fact that companies are holding on to money.
Part of the problem is the confusion around billing. I mentioned my own experience. I wanted to check what was happening, because some of my constituents were saying that they were getting email bills and they did not tally with what was coming through on the apps that they were being encouraged to use. I want to touch on apps and other things in a moment, but I looked at my 15 January bill and, according to the email bill that I received, I was due £181.95 for electricity. That is fair enough, but I looked it up on the app for the same period, and I was due £215.03 for electricity. What chance do people have if that is the kind of information that we are allowing energy companies to deal with? I did not come as a constituent with a complaint; I did this after investigation on my own account. There are lots of people out there who are seeing this on a monthly basis or, as I said, on a quarterly basis sometimes; they are seeing that their bills are inaccurate or confusing. That confusion is a key point, because if there is a wish to avoid paying back money that people have paid into the account and is too much, in certain quarters it might be considered convenient that people might be confused about what they actually owe and what is actually in credit.
Centrica’s response was that it wanted to see customers’ funds that are paid in ringfenced and it was disappointed that Ofgem had rowed back on that requirement. It mentioned that customers can request a refund from companies, but again, I come back to the main point—it is not their money. Why should customers have to go begging for a refund? They should be entitled to get that money back as a matter of course.
ScottishPower does not pay back, but at least it adjusts direct debits downwards where customers have a credit balance. It says:
“Some…companies, while claiming that they provide credit back at the click of a button, may not be taking account of a customer’s credit balance when setting that customer’s monthly charge. If they had a customer whose credit was £500 and their annual energy bill was projected to be £2,000, they set their monthly payment at £167. This results in a £42 a month higher charge or £504 extra per year. This means the credit doesn’t go down and the supplier keeps it on their balance sheet”.
I am grateful to Scottish Power for that comment, but it is also guilty of keeping people’s money.
E.ON has also talked about favouring ringfencing, which means that customers’ money is kept in a separate place in their business, not in the main account, so there is some protection in case of bankruptcy, for example. E.ON says it refunds on request, and that it can flex direct debits by 10%. I am sorry—that is not enough. E.ON goes on to say:
“We are aware that a number of companies have used balances in the past to fund their own commercial activities.”
That should just simply not be allowed. They are using customers’ money.
Shell Energy says that all requests are triggered so it will pay them back; it talks about the licence conditions
“that ensure we don’t allow a customer to build up debt which guides us to set an appropriate DD to cover usage across the year and adjust if it won't cover usage”,
and about the option to choose a variable direct debit. There are some meagre attempts out there to try to smooth out this situation for people, but it is simply not enough.
We have to look at how Ofgem regulates. Ofgem was happy to respond to me on this issue, but its letter said:
“Unfortunately, Ofgem does not advise on or get involved in individual cases.”
It is my belief that Ofgem does not look at individual cases; it is not looking at the real lived experience of people in the energy market at the moment. It is just not doing that, and that is a view backed up by Christine Farnish, a former Ofgem board member, who says firms are collecting more than they absolutely need.
Ofgem suggests that customers who believe suppliers have amassed too much of their money contact the firm to ask for their money back—to ask for their money back! It is not good enough. The response from Ofgem is weak, and not good enough.
I hope I have laid out clearly today some of the problems out there. I am only scratching the surface of customer issues; I have not mentioned a number of people who have been in touch with us. We need a mechanism for returning automatically overpaid amounts. The energy companies should print credit balances in green at the top of bills, with a notice advising customers of their rights; there should be a mandate for direct debits to account for credits when being sent out; and there should be a duty on suppliers to declare their total credit balances openly to the public.
Finally, I repeat this point: this money is not the energy companies’ money. I tell everybody out there to check their bills: look at them carefully. If they do not understand them, make a call, or get in touch with an MP or anybody else—Citizens Advice, or anybody who can help. Check the bills. If there is a credit amount, the bill payer should alert the company to the fact that they want every penny of that back, because that money is not the energy company’s money. I say to all those people: it is your money.
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