Ofgem urged to reduce energy ‘billing errors’ as 1.3 million households overcharged
UK energy customers have been overcharged a total of £102 million over the last year because of billing errors, new research has revealed.
Nearly 1.3 million households were forced to pay an average of £79 more than they owed, and some are still waiting for a refund, according to a study by price comparison website uSwitch.
The findings come just weeks after British Gas became the latest Big Six energy supplier to increase prices, ramping up the cost of electricity by 12.5 per cent for 3.1 million customers, despite falling wholesale rates.
“Households are already feeling the pinch from recent energy price rises,” says Claire Osborne, energy expert at uSwitch. “Having to pay for suppliers’ mistakes is unacceptable.
“We want to see companies do much more to make life easier for their customers. Accurate bills are the bare minimum they should expect from their energy suppliers.”
About one in three customers affected said they were charged for an amount that did not match their meter readings, while a quarter said their energy bills did not add up correctly. Other mistakes include suppliers getting direct debit amounts wrong (eight per cent), applying incorrect fees (seven per cent), and muddling bills up with someone else’s (five per cent).
It also took an average of 35 days for overcharged customers to receive a refund, but over a third of those out of pocket had to wait for over two months, and seven per cent are still waiting or have given up on getting their money back.
As if overpaying in the first place isn’t bad enough, Osborne says, being forced to chase companies to get their money back “simply adds insult to injury.”
The cost of billing errors may be even higher than the total of £102 million, since over a quarter of consumers admit to not paying proper attention to their energy bills. Of those who admit to not reading their bills, one in five say it is because they are too complicated.
Uswitch is calling for market regulator Ofgem and suppliers to dramatically reduce billing errors, reimburse customers within a month and issue bills that are easier to understand.
Suggested improvements to help customers spot mistakes include explanations on how the bill has been calculated, whether it was based on an actual meter reading, if the account is in credit, and reminders that the customer could save money by switching tariff or supplier.
“We have taken strong action to address billing failures by suppliers, with suppliers paying out over £40 million as a result of our investigations into these and related customer service issues in the last two years, and we continue to monitor the market,” an Ofgem spokesman said.
“Suppliers are required by Ofgem to treat their customers fairly – if a customer thinks that their supplier has made a billing mistake, they should contact them.
“We are working with suppliers to make bills easier to understand and Ofgem’s rules already require suppliers to make clear on bills whether they are based on a customer’s actual or estimated energy usage.
“Smart meters will address the issue of estimated readings as these consumers will be billed based on their actual energy usage.”