Energy suppliers are demanding large payments for back dated usage Yes, at Energy4 we can and we are very experienced in analysing and managing this type of situation, often to a favourable resolution for our clients
Sometimes energy suppliers make mistakes and we are experts at identifying any errors to provide you with independent checks. We can confirm if the demand is valid, and if so, assist in negotiating appropriate terms to settle the outstanding amount
Energy suppliers are demanding large payments for back dated usage can be discussed further
It’s much easier to begin negotiations to a successful outcome earlier in the process so it’s best to contact us as soon as you’re aware of any issue
Why do energy companies backdate payments?
Energy companies backdate payments to get back any money they are owed by customers who have been underpaying for their energy. This is usually a problem for Business owners who have estimated energy bills, whereby suppliers best-guess your usage and charge you accordingly, and those who pay by Direct Debit.
If, for instance, you pay a set amount of £80 each month, but your energy usage actually works out at £100 each month, then your energy supplier will be out of pocket by £20 a month, or £240 a year – in which case they’ll eventually come looking for the money they’re owed.
This can come as a nasty surprise to customers, who can suddenly see their monthly payments hiked up for no apparent reason. A recent example of this was when Shell Energy tried to backdate a customer’s underpayments over the last five years, which saw their Direct Debit payments increase from £72 a month to £130 a month, even though the account had been £148 in credit.
Thankfully for the customer, Ofgem regulations saw the Shell Energy customer’s Direct Debit amended and account refunded. But what are your rights if this happens to you?
How long can an energy company backdate payments?
Energy firms can only backdate energy bills for a maximum of 12 months, thanks to regulations introduced by Ofgem in 2019. This was to ensure that customers weren’t put in financial difficulty by energy payments they thought were up to date.
Back bills are usually applied to accounts where suppliers need to estimate usage as they haven’t received regular meter readings. Once a firm has the readings, they might send a catch-up bill if the estimated charge was too low.
Your energy company may be able to backdate bills past this 12 month cut off if you purposely prevent them from taking an accurate reading.
What to do if your energy company tries to backdate your bills
If your energy company sends you a backdated bill, the first thing you should do is check how far back the billing period stretches – you don’t have to pay for any energy use that stretches back more than 12 months.
If the backdated bill is for the last 12 months only, then you need to make sure that what your energy supplier is claiming is correct.
This means checking the meter readings displayed on the oldest bill in the 12 month period (if, for instance, you get a backdated bill in January 2020, you should check your bill from January 2019) and checking the meter readings on your latest bill.
You should then check this against the latest readings on your meters – if they tally, then your supplier is right and you’ll need to pay up. If not, you should get in touch with your supplier and tell them what the issue is. It’s likely you’ll need to go through your supplier’s official complaints procedure to get the issue resolved.
What are the back-billing rules?
You can’t be charged for gas or electricity used more than 12 months ago if you have not been correctly billed for it before.
Suppliers must make these terms clear in their contract terms and conditions.
The rules apply to Business owner energy customers.
They may not apply if you have behaved obstructively or unreasonably, preventing accurate billing. This could include:
- Blocking meter readings at your property on more than one occasion
- Stealing gas or electricity.
- Provide regular meter readings
- Tell them when you are moving in or out of a property.
- Think about getting a smart meter.