Views Sought on £4k Back Billing dispute Octopus Energy

[orfoster]

I wonder if someone can give me an opinion on the below, I've set it out so hopefully it's relatively clear.

It turns out her supplier was not the supplier she thought it was, they didn't complete the switch, she only became aware of this in April 2021 when the National Database was shared. Surely she doesn't have to pay the £4k debt?

The below was an e-mail I sent to Octopus on 5 March, they've literally not responded to any of it, no formal response, no response for the Data Processing either.

I'm really keen to get someone's view on the below situation.

Ps she became aware of it as the first step they took was to send a Debt Collector round to her address in January 2021, literally no other collection activities, nothing shown in the SAR either.



In summary Mrs G case is that there is no contractual relationship with Octopus Energy, Mrs G transferred to another supplier, raised a dispute with Octopus in November 18 which was ignored at the time of receiving a communication, she has never provided a meter reading and from the information I have seen not only is there no evidence of an implied contract, the evidence shows the opposite to be true. 

Pursuant to the Consumer Rights Act 2015 it is clearly stated that a "notice is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations to the detriment of the consumer".

'Significant imbalance' means that the rights or obligations contained within the term or notice are significantly weighted in favour of the trader and therefore place a greater burden on OctopusEnergy to show that the terms of the agreement are fair when raising a dispute.

Switching Supplier

In April 2018 Mrs G requested a switch of supplier from Flow Energy to Economy Energy, on 17 April 2018 she received a letter setting up her Direct Debit with that new supplied and furthershe received an SMS Message advising that the switch had completed. In accordance with Flow Energy Terms and Conditions she duly e-mailed them on9 September 2017 advising them that she was terminating ‘the termination’ the contract with them, she received no further correspondence from Flow Energy and Mrs G made payments to her new supplier.

Flow Energy Bills

Within the Octopus Energy account there are a number of Flow Energy Bills it is clear that these were never provided to Mrs G, the Flow Energy Statement for 1 October 2017 through to 20 June 2018 was issued on 2 July 2019 this was significantly after the termination of the contract, this was ‘Back Billing’ and shows a debit of £673.78, she was paying her new supplier. Despite this high accrual of alleged arrears Flow Energy made no reasonable attempts to contact Mrs G for payment, there was no contact. However, following her email of termination in September 2017 she made no further payments her intention clearly being to terminate the agreement with that company. 

Flow Energy further produced a statement on 2 July 2019 for the period of 21 June 2018 to 10 January 2019, it shows a further debit balance of £620.78, therefore so far a total of £1,294.56, again no attempts were made to contact Mrs G about this large debt accruing on her account, something which Ofgem require, no direct debit was in place and she had terminated her agreement and she had no knowledge of this debt accruing. 

Octopus Energy Acquisition of Flow Energy

It was not known by Mrs G at the time but in late 2019 a transfer occurred of the customer book from Flow Energy. Octopus Energy acquired Mrs G account with an alleged debit balance of £2,181.87, both companies would have been aware of this balance at the time and OctopusEnergy would have knowledge that there was no live Direct Debit instruction on the account at the point of acquisition, there were no Debt Collection activities for such a high balance, in the alternative the alleged debt was higher than the industry level of debt as identified by Ofgem by which point reasonable interventions should have taken place for a vulnerable customer. Put simply Mrs G has been treated significantly unfairly by both Octopus Energy and Flow Energy in the allowance of such a debt accruing with no contact or support.

Contractual Relationship

Aside from the evidence of a transfer to Economy Energy where Mrs G had formed a new contract she states the following. 

In accordance with Flow Energy terms and conditions Mrs Gill could terminate the agreement the relevant clause states ‘8.1.2 In all other circumstances (except where clause 7.2 applies), you can end this contract by giving us at least 28 days’ notice, or a notice period that we agree to, as long as by the end of the notice period’ following her notice of termination she received no further communication from Flow Energy.

Upon acquisition, Octopus Energy allowed the account to to continue accruing debt, with no Direct Debit or meter readings being supplied from acquisition to present date, there was no ‘intention’ for Mrs G to form a contract with either Flow Energy or Octopus Energy following her termination in September 2017. 

There must be an 'intention to make a contract'. Both Mrs G and Octopus Energy or Flow Energy must intend to be legally bound by the contract and both parties must understand what the contract actually means, this requirement within the Consumer Rights Act simply cannot follow as there was no intention to make a contract, the contrary is evident.

Fairness

There is a significant amount of inherent unfairness because when Mrs G received what she deemed was a ’suspicious’ email in late 2019 she responded on 12 November 2019 and clearly raised a dispute, she has already provided a copy of this e-mail but it states 'you are not my energy supplier, please remove me from your lists', Octopus Energy failed to respond or engage in any dialogue with Mrs G, she could not have made it clearer that she did not recognise or acknowledge the account. In the alternative, save as to the arguments clearly set out above, hypothetically had Mrs G been a customer, Octopus Energy have an obligation both in statute, Ofgem rules and Octopus Energy’s own fairness policies to recognise vulnerable customers and provide support. Octopus Energy have allowed a debt of over £4,000 to accrue on the account with no contact, this is entirely unfair conduct and creates an imbalance between the consumer and the business.

Data Processing

This e-mail has been copied to the Data Protection Officer for Octopus Energy as Mrs Gill is ‘objecting’ to processing and requiring ‘erasure’ of information, the relevant ICO Guidance is ‘Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies’ which sets out the key principles for processing. Mrs G objects to that processing on the following grounds.

1. The data is being processed is not fair or accurate, I have clearly outlined above why it isn’t fair or accurate.

2. There is no agreement or right to process that exists in any event for you to process data, Mrs G terminated her contract in September 2017 and has shown no intention to form a contract since, there is no lawful basis for processing.

Mrs G requests Erasure of information shared with the credit reference agencies, this is because the information has been processed unlawfully and against the 1st and 4th principle, more specifically the data has no lawful basis, is not fair and is not accurate.

You have one calendar month to confirm if you are complying with Mrs G request.

Outcome

Mrs G does not acknowledge there is a contract in place with Octopus Energy and does not acknowledge the balance, she raised a dispute which was not responded to and Octopus have allowed the alleged account to reach a significant level of debt with no reasonable steps taken to address it, this constitutes an ‘unfair relationship’, despite full knowledge that no payment method had never been in place and a dispute had been registered, she does not acknowledge the account or balance and therefore the account should be closed with no further action. 

Further, as outlined above there is no lawful basis for a company with no contractual relationship with Mrs G to continue processing her data and therefore this information should be erased and destroyed.
 

[fkofilee]

QQ - Not an energy expert but do you work for an Ombudsman or something? 

The format you are laying out above reminds me of a Ombudsman layout...

[orfoster]

Haha thanks. I’ll take that as a compliment. 
 

I am a senior trade union official but no energy expert. 
 

I also sued the Ass of Lloyds Bank in 2014 for Bank Charges and won - it was a widely reported case :). 

[fkofilee]

Yes please do  - I think it is very well structured and would make the issue quite clear to a experienced complaint handler!! 

Guessing the Lloyds stuff set you up really well? 

 

So from a perspective of an outsider. Issue here is that when there was a switch - It didnt happen and a debt kept accruing on the old account?

 

[orfoster]

I sent this in to them on 5 March. Since then the complaints handler has basically been a little childish not willing to respond at all. 
 

yes that’s exactly it in a nut shell. 
 

I know there is Back Billing code out there but I can’t find it. This says about old bills and also where a dispute is lodged and ignored. Can anyone point me to it?? 

[dx100uk]

does this debt show on her credit file?

 

dx

 

[unclebulgaria67]

Energy back billing: A guide to your rights

WWW.OFGEM.GOV.UK

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Back-bills are sent to you by your gas or electricity supplier when you've not been accurately charged - this page provides a guide to your rights.

 

[orfoster]

14 minutes ago, dx100uk said:

does this debt show on her credit file?

 

dx

 

It does, as a debt that is up to date, no arrears showing. Shows on one of the 3 CRA's

[unclebulgaria67]

Economy Energy accounts were taken over by OVO.   I wonder whether OVO have the Economy Energy information which might reveal reasons the switch failed.

 

At the time of the switch, was there an amount owed to Flow Energy ?  Just asking as Flow Energy may have rejected the switch, because of an outstanding amount owed to them.

[orfoster]

3 minutes ago, unclebulgaria67 said:

Economy Energy accounts were taken over by OVO.   I wonder whether OVO have the Economy Energy information which might reveal reasons the switch failed.

 

At the time of the switch, was there an amount owed to Flow Energy ?  Just asking as Flow Energy may have rejected the switch, because of an outstanding amount owed to them.

 

We did a SAR to OVO they acknowledged they weren't the supplier, absolutely no data about why the switch didn't go through, neither Economy (Ovo) or Flow (Octopus) are able to say why the  switch didn't go ahead, no there wasn't a balance with Flow.

 

I think my worry about this is, the consumer believed that she was in a contract with Economy and entirely behaved as such, she disputed Octopus and they ignored her, she didn't pay them but paid Economy, however the fact is Octopus were registered as her supplier.

 

The issue though is that if they failed to support/collect/contact her at all, that must be unreasonable? Obviously she is terrified about paying the £4k.

[dx100uk]

30 minutes ago, orfoster said:

It does, as a debt that is up to date, no arrears showing. Shows on one of the 3 CRA'

Sorry you confuse me...so the £4k debt is showing ?? But no nasty markers?  That doesn't makes sense?

 

Is she still being supplied by them? Or theres another one showing under who? For her current supply?

 

If she never received the original bills at the time they were issued, she doesn't over a penny outside of 12mths

 

Dx

[orfoster]

2 minutes ago, dx100uk said:

Sorry you confuse me...so the £4k debt is showing ?? But no nasty markers?  That doesn't makes sense?

 

Is she still being supplied by them? Or theres another one showing under who? For her current supply?

 

If she never received the original bills at the time they were issued, she doesn't over a penny outside of 12mths

 

Dx

 

 

Sorry, yes it shows £4K balance but no nasty markers, it shows 'all up to date' on CRA.

 

No, the moment she found out she was still with them she switched to Eon (Octopus didn't oppose the switch), that was a few months ago.

 

Nope, didn't receive the bills, they say she did, they say she 'read' the e-mails, however despite asking numerous times they won't share 1) the e-mails or 2) the read receipts they refer to. They aren't in her inbox she said the welcome e-mail she had (November 19) that she disputed went into her Junk and she regarded it as that as well but she still replied disputing it, prior to that all the Flow Energy bills she never received and the ones they are saying she had in 2020 she didn't receive either, obviously those are within 12 months though.

 

Despite the complaint being lodged on 5 March 2021, and really dispute was raised before then too, they will not respond to the issues, no formal response. I note that they are in breach of Energy Company complaints Regulations 

The Gas and Electricity (Consumer Complaints Handling Standards) Regulations 2008

WWW.LEGISLATION.GOV.UK

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These Regulations prescribe standards for the handling of consumer complaints by regulated providers and for the supply of information to consumers about the prescribed standards and levels of compliance with...

.

[dx100uk]

So

its not 'harming' her score?

, they are not chasing payment?

The bogus debt will vanish upon 6yrs being reached from creation date ... through non payment.

 

if i'm correct and excuse me if im not.. But why are you bothering to kick prams wheels??

 

 

[orfoster]

They weren't doing anything, she didn't know anything about it and then one day in January they sent a Debt Collector to the door, no letters, no calls, straight to doorstep collection. I e-mailed them raising the dispute and they held off any collection activity. 

 

Would gladly let it ride but am aware they will recommence and she is worried about the debt collectors calling with her kids there, otherwise I would just ignore them.

 

We could just do nothing now, wait for them to recommence and say there is a dispute and they've failed to reply?

[dx100uk]

a dca is not a bailiff

and have 

ZERO legal powers on any debt no matter what it's type

 

pers i'd  simply totally ignore them.

 

who was the DCA by the way.

 

dx

 

[unclebulgaria67]

You say payments were made to Economy.  When was the last payment made to them and was this a Direct Debit payment ?   Can she provide proof of the Direct Debit payment ?  The DD that was set up for Economy might reveal a customer account reference, which would indicate Economy did take over the supply.

 

If you can get hold of Economy account reference numbers, there is probably a way to find out from regulators what happened with the supply switch. Sometimes when companies fail, they will set up a facility for former customers to get hold of records. Ovo might not hold them, but another company may have access.

[orfoster]

Yes we have the Account Reference, payments were via DD, Payments Continued until Economy went under (she wasn’t communicated with) when we did a SAR to OVO they provided very little information They hold essentially a line on a spreadsheet. She made payments to them for just over a year, she didn’t realise the payments to them stopped. 
 

Do you think OFGEM might hold information about what happened with the switch?

[unclebulgaria67]

You could ask OFGEM about the issues.

 

Sounds like massive failure to maintain accurate data.  Not sure why Octopus think they still have the supply, unless Economy or those responsible failed to update the energy industries central database to register the supply information.

 

Having had a little insight at an energy company reviewing how they operated,  when a consumer switches suppliers, the new suppliers update a central industry register ( cannot remember name) to show that Mrs X at the address concerned is now with X energy company. 

 

If Economy never changed the information on the central register, then I suspect some scan has been done by Octopus and they believe the supply is still with them, so they must be owed the amount requested.

 

Just trying to apply some logic to the problem and coming up with a possible explanation.

 

The remedy is that if your friend proves the account with Economy was the last supply she registered, OFGEM may tell Octopus to go away and instead ask OVO to invoice your friend for last 12 months supply based on the OVO standard variable rate for estimated usage.

[FruitSalad1010]

What are you seeking to achieve?

Are you looking to solely dispute the debt or are you seeking compensation for the wrong doing against you?

The backbilling condition you are referring to has its roots contained in the licensing conditions for the various suppliers of electricity and gas which can be found here.

The reference for the licensees obligations regarding backbilling is the same for both suppliers of gas and electricity, namely condition 21BA.

 

Quote

Condition 21BA. Backbilling
Part A: application to Domestic Customers
Prohibition
21BA.1 Subject to paragraph 21BA.2, where the licensee or any Representative issues a Bill to a Domestic Customer or otherwise seeks to recover (including via a Prepayment Meter) Charges for the Supply of Gas from that customer (hereafter a “charge recovery action”), they must only do so in respect of:
(a) units of gas which could reasonably be considered to have been consumed within the 12 months preceding the date the charge recovery action was taken; and
(b) where applicable, amounts in respect of a Standing Charge or any other type of supply charge accrued within the 12 months preceding the date the charge recovery action was taken.

 

[orfoster]

Just seeking to dispute the debt really. 

 

There are a few issues I have with all of this and I know that her case has some weaknesses

 

1) Surely the Energy Company had to be aware of the debt building up, in fact it should have indicated a vulnerable customer.

2) A review should have identified that there had never been a Direct Debit in place.

3) Debt Collection activity should have commenced, thus identifying the issue and mitigating the debt.

 

It's just a general fairness argument, maybe I'm wrong.

 

Thanks for the backbilling info. 

[FruitSalad1010]

Strictly speaking as dx100 put it there is nothing that explicity requires disputing until Mrs G receives a letter before claim or court claim.

 

There are a few important questions to be considered written by others above, including whether there was any debt owed prior to the account switch from Flow to Economy in April 2018 and whether this had been properly billed for.

A switching of account can be disputed by an energy company if there is an amount owing above £500 (provided this amount itself is not in dispute at the time).

Where this causes issues is when the company's fail to communicate. The fact that Octopus claim money is owed instead of any alleged outstanding debt transfering to Ovo indicates the switch didn't take place properly.

It appears that by failing to record the switch Mrs G's data may have been mis-handled either by Octopus or Ovo or both.

 

Just so it's clear, Mrs G has been paying a different company (OVO) for electricity and gas while this alleged debt which Octopus previously (Flow) has accrued?

 

Is the alleged debt still accruing?

Between what dates does the alleged debt specifically refer to, have any bills with dates been produced, can it be established when they the bills were produced?

Edited June 7, 2021 by FruitSalad1010

[comebackjimmy]

I think that if debt collection activity resumes they will take it to a point where they apply to Court for a warrant to fit a pre-pay metre with debt reduction settings or failing that, disconnect the supply.  That will all come with extra charges so probably better to try and get the account sorted once and for all.  I have another thread on here with a similar problem.

[FruitSalad1010]

Yes I agree, I don't think this ends if it is ignored and personally it would not be my course of action to ignore it. One proposed way forward is to bring a complaint to the Ombudsman, this will have the effect of registering the fact the debt is disputed with an "independent" party.

The benefits of raising a complaint with the Ombudsman are the likelihood of a halt of any further proceedings to collect the debt until the dispute is resolved, as well as the likelihood (according to the version of events presented), an award in favour of the complainant for the stress and inconvenience caused by the mishandling of the account.

The risk of using the Ombudsman is that they may make a ruling regarding any debt in the interest of "fairness" that could have no requirement to be paid back. If the Ombudsman makes such a decision it may cause additonal issues in the future should it be necessary to advocate to a judge that the Ombudsman has made an incorrect ruling regarding the validity of any debt.

Any ruling by the Ombudsman is likely to hold significant weight if it is later presented in court.

[unclebulgaria67]

Think the person concerned has already switched suppliers, so Octopus could do nothing with the supply meters. #12 post says supply now with EON.

[dx100uk]

Be a very good thing if whomever thinks they are owed money tries to goes to raise a CCJ court claim , which is a very very remote possibility but a good thing As the full story will out along with the truth.

 

fat chance that will happen

 

ignore them.