Southern refusing to reduce DD payment rate for in-credit account

[Chromatix]

My English friend is in difficulty again.

 

Some time ago, her ex-partner moved out, having failed to pay utility bills for a while (and several other financial offences). This left my friend, JC, with large balances to repay on a fixed income. This she has, apparently, managed to do.

 

I have encouraged her to change energy suppliers. Southern are, predictably, not the cheapest supplier - for electricity or gas - for the North Yorkshire town she lives in. She's put this off because dealing with businesses is stressful for her. She's a weak and slow reader, so she usually hasn't bothered reading her bills - if anything, she relies on her mother to interpret them, which is not necessarily reliable.

 

It seems that the electricity and gas bills were being paid at a rate of £50 per month each, on Direct Debit. Doubtless this relatively high rate was to support the repayment of the outstanding debt. This has been very difficult for JC to pay, but she has managed with some help from myself and her mother.

 

However, this rate has not yet been reduced, despite the debt being acknowledged as repaid. JC told me that she expected the rate to be reduced from about now on, but she has just received some kind of letter "demanding" the £50 for each service. The demand is unusual, given that it is on Direct Debit, but the poor state of her bank account may be relevant.

 

What concerns me is that, apparently, somebody came to read the meters in mid-December, and noticed somehow that what she had been paying was too high, and that the account was at that point £200 in credit. I don't know why she only told me this now, rather than at the time.

 

All this is for a small council house, which JC lives in with her young daughter. (I don't know if she qualifies for the cold-weather bonus - I hope so.)

 

However, I have asked her to show me the most recent bills, which arrived recently and which - for a change - she has kept hold of. I'll also ask to see the demand letter. I should get to see them tomorrow.

 

Have other people had experience with payment rates out-of-kilter with actual consumption? I'd heard rumours about it before, but I don't see very much in concrete.

[citizenkain]

chromatix,my old maw had this prob,this direct deit thing that goes on,your not paying your actual bill,its a finance plan set up by whoever is supplying you a service,my mother was paying £5 a week,they sent her a letter to pay £15 a week,they want to keep you in credit,same as bt broadband, I used to pay them 45 a month when I first started with them to cover phone and broadband,I discovered I was way ahead so I got them to change it,I only pay 30 a month now,everyone should keep their eye on these finance plans!

[Chromatix]

Yes, I do understand that the payment rate is typically averaged over the year. I just find it disturbing that Southern are prepared to demand the full payment when she is, apparently, either two or four entire months ahead at present, and is due for a reduction anyway.

 

For reference, if she really is £200 ahead and got this back, it would completely wipe out her bank overdraft, which would help her a great deal at this point. I'll be able to decide what to do when I see her bills tomorrow.

 

ETA: one thing that might explain why she's so far ahead at this point, is that I helped her implement some energy-saving measures a while ago. These included a pile of CFL bulbs, setting the heating to a constant 21°C instead of alternating between 20 and 25, and trying to use less hot bathwater.

Edited January 7, 2009 by Chromatix

[DCA-KING]

call them and ask them for the amount back if they say no say il pass the matter on to ofgem and consumer direct and make a complaint

Regards DK

[Bookworm]

Cancel DD, set up standing Orders instead this way you say how much and when.

 

I had the same thing with my lot last year, by their own account, they owed me hundreds, yet when I reduced my monthly payment, they started kicking off... It took a few nasty letters and speaking to the organ-grinder instead of the monkeys to get them to reset my payments balance and get a cheque off them too. The important thing is that throughout, *I* was in control of how much I was paying them. As long as you pay by DD, *they* are in control. ;-)

[Chromatix]

Yep, good ideas there, which I'll bear in mind.

 

I don't actually need advice at this point, I'm just documenting things to help others. If things get nasty, I'll ask more specific questions.

 

JC recently had the same problem with BT, actually, and so did her mother. The "overseas" call centre (described by her as "f****** p*k*s") tried to claim that £35 per month was accounted for by a "calling plan", when she had made no outgoing calls on the line. I discovered no calling plan on BT's website that got anywhere near that total, and anyway she hadn't asked for one. So I helped her write a strongly-worded letter which got things fixed pretty much immediately - now it's more like £12 a month, and she got a refund of the credit balance. I think the difference is that a letter gets read by a British citizen who actually has the tools and authority to do something.

[Chromatix]

Okay, I've just found out the situation is far more serious than we realised. I'm still finding out the details, but we may well need the forum's help in several areas.

[Chromatix]

Right, so far as I can tell:

 

- Southern claim that the account is *not* in credit. The demand letter is presumably because the Direct debit bounced. I *still* haven't seen all the details on the bill, so I don't know the relationship between present consumption and repayment rates. However, the balance *may* be within limits for transfer to a different supplier.

 

- Lloyds are applying penalty charges right left and centre. Again, I don't know the full details yet, but it looks like Unpaid Item and Unauthorised Overdraft Arrangement & Daily Maintenance Fees. I'll shift discussion of Lloyds into the appropriate Banking forum.

 

I've advised her to immediately move her benefits payments - including the cold-weather supplement she's supposed to get soon - to a new account at the Post Office. Unfortunately I'm having trouble getting her to understand just how urgent and necessary this is, so she didn't do it while she still had time today.

[indebtstudent]

It is possible for monthly payments to be way out in terms of actual consumption, in fact it happens all the time.

 

The best way to sort this is with a meter reading but even then you have to be careful, eg if the estimates were too low and you give a reading now dont let them charge you all of the units at the current (higher) rate.

 

My understanding is a DD could show as paid one day them returned the next, so this could explain confusion as to the balance.

 

They should be able to send copy bills, the last two or three should be sufficient. Also it is unclear whether you are talking about gas, electricity or both. It makes a difference because gas usage is very seasonal.

 

My DD for gas is £55 a month (I'm paying off a debit balance). Now if I was starting from zero this would put a large credit on my account going into Winter but my bills, like most, are a lot higher during the colder months.

 

Even if your friend has a dual fuel account look at the statements for each seperately, its the only way to make sense of it.

[indebtstudent]

Also it is possible that the current prices are higher than they were at the time the payments were set but they should at least be returning any credit if the payments do need to be higher to cover consumption.