UK energy billing errors exposed

Billing errors cost the UK’s residential energy consumers around £102m last year.
Published: Fri 18 Aug 2017

Approximately 1.3m consumers were overcharged by an average of £79 each – and some are still waiting for a refund, according to uSwitch, a UK-based price comparison service and switching website which carried out a billing survey. 

Nearly one in three of those affected said they were charged for an amount that didn’t match the meter readings they had supplied, while a quarter said their bill didn’t add up correctly.

Billing blunders

Other billing errors include suppliers getting direct debit amounts wrong (8%), applying incorrect fees (7%), getting tariff or product details wrong (5%) and sending out bills to the wrong customers (5%). Research shows that it currently takes on average 35 days to resolve billing issues and finalise refunds where applicable. It was also discovered that 7% of customers have yet to even receive their refunds. One in 10 customers waited between one and two months to get their money back and almost a third (28%) waited over two months.

It is possible for even more of these blunders to go unnoticed since more than 27% of consumers admitted to not reading their energy bills carefully.

More convenience for consumers

Energy Expert Claire Osborne said that it’s unacceptable for customers to be paying the price for suppliers’ mistakes. She highlighted that households are already feeling the pinch from recent energy price increases and that having to chase for an average of 35 days to get their money back adds insult to injury.

She said: “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.”

Uswitch has asked market regulator Ofgem and suppliers to “dramatically” reduce billing errors, reimburse customers within a month and issue bills that are easier to understand - one in five who do not read their bills say it is because they are too complex.

It suggests bills should show whether they are estimated or based on actual meter readings, whether the customer must take any action after receiving the bill, alert the customer if they are on a standard variable tariff and a prominent reminder the customer could save money by switching tariff or supplier.

Ofgem takes action

Ofem said it has taken “strong action” to address billing failures by suppliers, with energy firms paying over £40m as result of its investigations.

A spokesperson added: “Suppliers are required by Ofgem to treat customers fairly – and 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.”

The findings come just weeks after British Gas became the latest Big Six energy supplier to hike prices. It is ramping up the cost of electricity by 12.5% for 3.1m customers, despite falling wholesale prices.

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 - one in five who do not read their bills say it is because they are too complicated.