As energy firms sit on £226m of customers' cash, we demand... GIVE US OUR MONEY BACK NOW!

Published 24th Jun 2009

Energy companies could be sitting on more than a quarter of a billion pounds of their customers' money because they charge too much on direct debits.

Yet they are not obliged to reveal how much of our cash is lying in their coffers and there is no statutory duty on them to repay the money.

Now - in midsummer - Money Mail is encouraging you to check your bill, demand immediate repayment of any money you are owed and order your energy company to reassess your direct debit.

Energy consumption tends to be lower in the summer so, if you are owed money, the amount will grow in the coming months unless you take action.

'Smart meter' technology exists to provide accurate readings of our energy consumption. Details are sent directly to the companies and this would allow them to take a direct debit of precisely what we owe at the end of each month or quarter.

But this kind of technology will not be widely available until 2020 - and it is not in the energy companies' interests to roll it out faster while they are allowed to sit on our money.

Nearly 15million customers pay by monthly direct debit, so even small overpayments can result in massive profits. British Gas, the biggest supplier, makes automatic refunds only once you are in credit by £200. One estimate suggests that last winter households were in credit by nearly £450 million to their gas supplier alone.

Energy providers claim the credit and debit balances cancel each other out. But the same survey, by comparison site Moneysupermarket, estimated debts to gas companies totalled £224million - meaning they are ahead by £226million overall.

Energy companies have their customers over a barrel because they make paying by monthly direct debit the cheapest option.

Some readers have told us that when they disputed the size of the direct debit, they were threatened with being shunted onto a more expensive tariff. Many inaccurate bills arise because use of gas and electricity is estimated. Suppliers have to take an actual meter reading only every two years.

Nine out of ten complaints to the Energy Ombudsman are about bills, and around a fifth claim companies ignore householders' own meter readings.

Most energy companies are actually in foreign hands and their treatment of UK customers often contrasts sharply with that given to their home country domestic customers.

* In the UK, French-owned EDF Energy waits until you are owed £150 and then refunds you. However, its French customers are automatically refunded twice a year if their direct debits are higher than their usage.
* NPower, owned by German company RWE, recredits sums over £60 once it has an actual meter reading which is usually done every six months. But in Germany, customers have an annual assessment when an ' adjustment payment' aims to reduce their balance to zero.
* Scottish Power refunds those customers who are more than three months in credit only after it has made a reading. But its Spanish parent company, Iberdrola, reads meters every two months, so over-payments are rare.
* Eon, another German-owned company, is best behaved. It refunds any customer who is £5 or more in credit and aims for balances to be zero in spring.
* Scottish & Southern Energy, a UK stock market-listed company, automatically refunds amounts over £100. It claims 95 per cent of meters are read once a year and 70 per cent are read twice a year.

Energy regulator Ofgem is reviewing the direct debit systems of the six major suppliers following widespread complaints. Its initial findings reveal that 69 per cent of complaints relate to British Gas, though with 16 million customers it is the largest energy company.

However, the second biggest - Scottish & Southern Energy with 9.4million customers - had the lowest number at 2 per cent.

While Ofgem has criticised suppliers for lack of transparency and poor communication following direct debits being increased, it says it has not found any evidence that they are charging more than they are due.

It is considering bringing in new rules for direct debits but, given their initial findings, it is unlikely to address overpayments.

Source: ' This is Money '

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