Is your energy supplier overcharging you?

In this guide you’ll find answers to the following questions:

  • Why is my electric bill so high?

  • I think I’ve been overcharged – what can I do?

  • How do I claim a refund if I’ve been overcharged?

  • How do I check if my meter is faulty?

  • Can I be overcharged on a fixed-rate plan?

  • How can I avoid exit fees?

Why might my energy bill be higher than usual?

It’s normal for your energy bill to be different from one month to the next – it’s usually higher during the winter months when your heating is on more often and your lights come on earlier during the day.

If you’ve noticed your consumption is higher than normal, even taking the time of year into account, consider the following common reasons for increased energy bills:

  • You’ve been putting the heating up more regularly

  • You’ve bought a new tumble dryer or dishwasher

  • Relatives or tenants recently moved in with you

If your circumstances haven’t changed, but your average electric bill has suddenly increased, this could be down to one of several issues:

  • You’ve not submitted any recent meter readings

If you don’t keep up with meter readings, your bills will be calculated using estimates based on your average energy usage over a specific period. This estimated figure could be incorrect if you’ve not submitted a reading for more than six months.

  • Your meter is faulty

If your usage hasn’t changed, and your bill is based on a recent meter reading, there might be a problem with your meter.

  • Your supplier has raised its prices

Although your supplier should let you know if the prices have changed, there may have been a communication breakdown. Alternatively, you may have automatically been moved from a fixed rate to a standard tariff at the end of your current deal, so it’s always worth double-checking. 

I think I’ve been overcharged – what can I do?

The first step is to get rid of the uncertainty of estimated energy billing. It only takes a few seconds to take a meter reading, and it helps prevent your supplier from overcharging you. Suppliers will err on the side of caution when it comes to estimating energy bills. They’d rather have consumers pay in advance for their energy to avoid falling behind on payments, even if the consumer doesn’t end up using all that credit. 

To avoid being overcharged due to estimated bills, submit a meter reading at least four times per year – or once every three months. This provides an average electric bill accounting for seasonal changes in temperature and corresponding energy use. If you have a standard meter, jot down all the numbers except those after the decimal point or any highlighted in red. Most of the big six suppliers let you submit these online, or even via a smartphone app with a quick snapshot of your meter.

If you have a smart meter, you don’t have to do anything – it automatically sends regular meter readings to your supplier, allowing it to track your usage over time. This should eliminate all guesswork, keeping your bills accurate. The government is currently in the process of rolling out smart meters to all homes in the UK, with a target of finishing by 2024. 

Step 2: Query your bill

It’s easy to ignore a high electric bill, but when in doubt it’s always better to ask. This is particularly true with smart meter overcharging because smart meters should theoretically eliminate issues related to estimated billing. Sometimes an inflated bill is due to nothing more than a clerical error, so you should always query your bill to receive a refund if you think something’s gone wrong.

You should also query what’s known as ‘catch-up’ bills. If you’ve been underpaying for your energy because of low estimated bills, and the price of your energy rises, you could be in for a double whammy when the first meter reading comes in much higher. Make sure this catch-up bill properly spreads the extra units added on for the meter reading over the entire billing period so some of that energy is charged at the previously reduced rate. Going forward, make sure you supply regular meter readings to avoid falling foul of this practice.

Step 3: Read the fine print

Apart from clerical errors and estimated rates, another common cause of unexpectedly high energy billing is an exit fee. Not all energy plans come with exit fees attached; they’re most common with fixed-rate plans. Exit or cancellation fees are meant to keep you from switching suppliers before the end of your agreement. It’s always a good idea to read the fine print before you sign up for any new deal, so you don’t get caught out with an unexpected fee when you try to switch. 

Energy suppliers aren’t allowed to charge an exit fee if they’ve increased prices and you want to switch – in these circumstances you should be able to move suppliers without any financial penalty. Refer the supplier to Ofgem’s Standard Licence Conditions 23 and 24 and inform them that you wish to leave the plan by the date that the higher prices will come into effect. 

Step 4: Compare energy tariffs

When your energy supplier is about to increase prices or you suspect they’re already overcharging you, it’s time to compare your options. In fact, you should compare energy plans on a regular basis just to see what’s out there. You could save a bundle by doing so, because there are usually cheaper deals on any given day.

Default or standard plans typically cost far more than competitively priced tariffs, and if you don’t compare your options you won’t know about online deals, dual-fuel plans, or cheap fixed-price rates. 

Step 5: Switch suppliers 

After you’ve compared all your options using an energy comparison site, the final step is to switch suppliers. Recent Uswitch figures show that over half of UK households haven’t switched suppliers within the past four years, which means they could be missing out on better deals. The process is simple and straightforward. All you need to switch is your postcode and a copy of your latest energy bill. 

How do I claim a refund if I’ve been overcharged?

Don’t despair if you’ve been paying too much for electricity and gas. You’re entitled to a refund from your energy supplier, whether the overcharging is due to billing errors or a faulty meter. A simple way to check if you’re owed any money due to overpayment of estimated figures is to look at your online account. Credit is automatically refunded by the big six suppliers annually, but if you use a smaller supplier you’re more likely to have to ask for your money back.

Do you think you’ve been overcharged by a former supplier? This happens more frequently than you might expect. The My Energy Credit campaign was launched by the big six suppliers in 2014 to refund an estimated £153 million in credit to former customers – it’s no longer running, but the big six are easily contactable, and obligated to pay any money owed within eight weeks.

Why has my electric bill increased after a smart meter installation?

One of the key advantages of smart meters is that they send regular, automated meter readings. So, one potential reason why your electricity bill is abnormally high is because you’ve previously relied on estimated readings, and your consumption has been greater than you thought. Another might be that your switch to a new meter has coincided with moving to a new tariff, or a price rise on your existing tariff. If you’re still on your supplier’s default standard variable tariff, now is the time to perform an energy price comparison to check you’re on the best possible deal.

How do I check if my meter is faulty?

Meter readings are used as the definitive measure of energy use, so what can you do if you think your gas or electricity meter reading is too high? If you suspect that your high electric bills are caused by a faulty meter, try these steps first: 

  1. Turn off all your appliances and lights for at least three hours. Watch your meter during this time. If the numbers keep going up, there could be a fault. 

  2. Check your digital meter. Does it show an error message? 

  3. Look for any signs of leakage. If your meter’s leaking, contact your supplier immediately for assistance. 

A sudden, unexplained power cut could also be a sign of a faulty meter. If you suspect problems due to sudden spikes in your energy bills or any of these other warning signs, report it to your supplier, who will send an expert to test your meter. 

How much does getting my meter tested cost?

In most cases the testing will be free, but if the meter needs replacing you may be charged for this. Some suppliers will waive the charges if you take this opportunity to upgrade to a smart meter.

Can I be overcharged on a fixed-rate plan?

No, your fixed-rate tariff shouldn’t change except in two circumstances: one, if the fixed-rate tariff has built-in, structured price changes. The other is if the government should raise VAT from its current rate (5% on domestic bills, 20% on business tariffs). Make sure you read the fine print.

Suppliers are also obligated to send you advance warning when your current fixed-rate tariff is due to end, giving you up to 49 days to search for a new tariff or supplier. During this “switching window”, you cannot be charged any exit fees attached to your fixed-rate plan – if they try to do so, you have every right to complain about this added charge. 

How can I avoid exit fees?

The price for fixing your energy costs for a year or more usually come in the form of exit fees, a fixed sum that you’ll be liable for if you switch to another tariff before your current deal comes to an end. However, keep an eye on the end date of your tariff – when you enter “switching window” period. During this period, you’re free to switch to another tariff – fixed rate or otherwise – without incurring those fees.

An increasing number of suppliers and fixed-rate tariffs come with no penalty fees attached – check the terms and conditions carefully before signing up. Other suppliers may offer to pay part or all of your exit fees to tempt you to switch – again this should be made clear when reviewing their offer.

You might also find that an alternative fixed-rate deal offers such good value that you’ll save money overall even if you end up paying the exit fee, so factor this in too when considering whether to switch or not.

Note: if your supplier raises prices without it being a condition of your fixed-term contract, you shouldn’t be liable for any exit fees when switching away from them. If it attempts to charge an exit fee or bills you for the higher prices, make sure you complain.

Can I complain about my energy supplier?

What should you do if you feel your supplier isn’t addressing the issue? If you’ve received a larger bill than usual and the energy supplier refuses to help, don’t give up. Energy regulator Ofgem states that your complaint must be answered within eight weeks, or you have the right to take your dispute to the Energy Ombudsman.

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Published on Wed 23 Oct 2019 03.30 GMT