Energy back billing to be examined by Ofgem

Energy back billing policies are to be examined by Ofgem after a previous voluntary agreement policy was thought to be ‘lacking consistency’ across UK suppliers.

What is energy back billing?

Energy back billing to be examined by ofgemEnergy back billing is when a supplier charges a consumer for extra electricity or gas that they may have previously used outside of their contractual usage.

Changes are coming to stop energy suppliers from charging customers for gas and electricity that was used more than 12 months ago. Ofgem are set put a ban in place so that providers can no longer profit from charging customers for extra energy used after a certain time frame.

New rules proposed by Ofgem mean that if a customer has been paying an incorrect amount for their energy, suppliers will not be able to charge them for anything they may owe from a year or less ago. This is set to replace the current voluntary agreement which has been in place since 2007 because Ofgem are concerned that there is little consistency with how energy companies are back billing customers.

When does energy back billing happen?

energy back billingBack billing often arises when bills paid are being estimated, rather than based on actual correct usage. Because these bills are estimated, the readings are often found to be incorrect once the meter reading is given, resulting in customers often paying too much or too little.

If it transpires that the customer has paid too little, the energy provider is entitled to charge for the extra gas or electricity used. However, they should only be only be doing this for amounts up to 12 months previously according to current agreements.

What changes are Ofgem making to energy back billing?

First changes to the management of energy back billing came in 2007, when the 11 energy providers all signed a voluntary agreement to standardise processes. Since then, lots more suppliers have sprung up in the market and there are now over 50 companies operating in the UK.

Ofgem fear that there is now a lack of cohesion in energy back billing systems and want to gain more control over how back billing is carried out. Looking at the current system, it will examine the different types of consumers that may need protection and to what kind of detail this should be implemented.

Some providers do have a back billing policy in place but many of them do not have a standard process for charging customers for extra energy used.

Rachel Fletcher, senior partner at Ofgem, said: ‘Getting billing right is an essential part of customer service, but when things go wrong we want to ensure that all customers benefit from the same protection against back-billing.

‘We cannot be certain that this is the case now under the voluntary commitment. We expect suppliers to put their customers first, which is why we are proposing a new enforceable rule to provide this protection.’

energy back billing for businessesHow can I refund from my supplier if I have been overcharged?

If you have been over charged or realise you’ve overpaid your energy bills then you are within your rights to ask the supplier to refund you for any payment up to 6 years. For contact details and how best to claim your refund please visit Energy UK.

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