Energy retailers have been issued a warning after various consumer bodies found a number of suppliers are incorrectly charging customers for unbilled usage beyond the 12-month cut off point.
SLC 21BA (backbilling requirements) sets out the conditions under which energy suppliers can bill their customers. These requirements protect domestic consumers and microbusinesses from being charged for unbilled consumption over 12 months old, except for where a consumer has behaved in an “obstructive or manifestly unreasonable” way.
Situations which may lead to suppliers seeking money for previously unbilled energy include retailers failing to send a bill at all, providing inaccurate sums and calculating from estimated readings, to name a few.
Ultimately, it is the responsibility of suppliers to bill consumers correctly for their usage and to ensure accounts are correctly reconciled. Consumers must not be held responsible for failing to identify errors in their billing or that a debt balance is accruing. Furthermore, a failure from a customer to provide a meter reading will not absolve the supplier from the backbilling limit.
In a letter to all retailers published today (17 December) Ofgem’s interim deputy director of retail monitoring and compliance Karen Mayor revealed the regulator had been contacted by consumer bodies Citizens Advice, Citizens Advice Scotland, the Extra Help Unit (EHU) and the Energy Ombudsman over the issue of backbilling.
Mayor reminded suppliers it remains their responsibility to accurately bill customers and adhere to the appropriate licence conditions.
“We will consider the evidence provided by consumer bodies, and review suppliers’ compliance with the backbilling requirements. Where we have reason to believe that suppliers are not applying the backbilling requirements correctly, we will investigate further and take action to ensure compliance and provide redress to any disadvantaged consumers”, she added.
Today’s letter follows a report published earlier this week by Citizens Advice which raised concerns about the issue of backbilling.
To highlight its point, the report used a case study from the EHU which revealed a customer received a bill for £2,000 after three years. The EHU asked the supplier to review this in line with the backbilling rules and the account was credited with £2,200.
While Citizens Advice cannot reveal more details about suppliers involved with incorrectly backbilling, the recently published star ratings table contains details about billing accuracy.
The results for Q3 show while most suppliers achieved a bill accuracy of more than 90 per cent Ovo-backed Spark Energy scored just 72.7 per cent – the lowest of any supplier.
Orbit Energy, which was the second lowest rated supplier, was also the second worst for bill accuracy with 74.7 per cent while Enstroga, the supplier ranked bottom overall, had 79.3 per cent.