Energy firms owe households £1BILLION in overpaid bills – are you owed a refund?
New research shows two in three homeowners are owed money by their energy supplier
GREEDY energy firms owe UK households a staggering £1 billion in overpaid bills, according to new research.
The average home is in credit by nearly £90 on their gas and electricity bills and two in three homeowners are owed money by their supplier.
The problem arises because energy firms estimate bills – and only actually check meters once every year or two.
On average homeowners have overpaid by £86.60 because of poorly calculated utility bills, a study by comparison website Gocompare.com Energy found.
One in four of the 1,300 people surveyed said they are owed more than £100 by an energy company.
The survey found that nearly four in 10 homeowners who accumulate a positive balance usually leave the overpayment with their energy supplier to smooth out seasonal variations in their bills. Just one in 10 demand a refund as soon as their bill is in credit.
It means that UK energy suppliers are earning interest on £1 billion of overpayments from their own customers.
A little over a quarter (27 per cent) of homeowners in credit to their energy supplier said the overpayment had been automatically refunded, while 21 per cent had asked their provider to reduce their monthly direct debt payments.
The issue of credit balances was also highlighted by the recent collapse of GB Energy Supply – the first domestic energy supplier to close in ten years.
Ofgem, the energy regulator, provides a safety net for customers should an energy provider go out of business, removing any risk to your supply, or the likelihood of any financial loss.
This includes ensuring consumers will not lose any credit balances. However, despite the safeguard in place, it’s likely households will become increasingly cautious about having large credit balances with their supplier.
HOW TO GET A REFUND IF YOU’VE OVERPAID
Ben Wilson, of Gocompare, said: “Energy suppliers generally decide what to bill you by estimating your annual energy consumption and dividing this into 12 equal monthly payments.
“While direct debits can help smooth out seasonal variations, if the estimated usage is set too high a large surplus can quickly accumulate, especially over the summer months when energy consumption tends to be lighter.
“Though some people are happy to carry a ‘summer surplus’ to offset higher winter bills, if your account is in credit after winter bills have been settled, then you should seek a refund from your supplier.
“If you think your direct debit payment has been set too high, contact your supplier, tell them your meter reading and ask them to review the arrangement based on your actual usage.
“Depending on the size of their credit balance, customers should be entitled to receive a refund.
“I expect that the GB Energy collapse will encourage more consumers to tackle their provider if they see a significant credit amount build up on their account, however, customers should be reassured by Ofgem’s safety net.”
The big six energy suppliers – British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE – have direct debit policies that cover refunds. While each company’s policy differs slightly, automatic credit refunds are typically made at the review date for balances of over £5 where an accurate meter reading has been supplied.
Mr Wilson added: “However, customers who have built up a credit balance are entitled to ask for it at any time and providers are obliged to refund overpayments unless there are reasonable grounds for withholding it.”
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