Energylinx News

April 3, 2017

Ofgem promises new security for consumers from back-billing

Energy Bill Back Paying Energy suppliers will no longer be able to charge customers for gas and electricity used more than 12 months ago, under new rules proposed by regulator Ofgem.

This would mean if a customer has been paying an incorrect amount on their energy bills, their energy supplier won't be able to bill them for anything that they owe from more than 12 months ago.

Currently, energy suppliers have a voluntary agreement that was put in to place in 2007. Ofgem is now concerned, in part due to receiving case studies from Citizens Advice, that the voluntary principle is not being applied consistently and that not all suppliers have appropriate back-billing protections in place.

Back-bills mainly result from suppliers using estimated bills until they take an actual meter reading which may show that the customer's consumption is higher than expected. Suppliers then send a 'catch-up' bill to recover the difference. Sometimes this can result in large amounts being owed and financial difficulties for the customer to pay it back.

Rachel Fletcher, Senior Partner, 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."

Ofgem is also considering whether to introduce a shorter time limit on supplier's back-billing customers as smart meters are rolled out. Smart meters enable suppliers to remotely obtain actual, rather than estimated meter readings, which should allow them to reduce the length of time they need to back-bill these customers.

Ofgem expects the new rule to go live this winter.

Posted on April 3, 2017 at 02:44 PM