Is your energy supplier overcharging you?

Have you been charged more for your energy than you expected?

It’s normal for your energy bill to be different from one month to the next. However, if you’ve received a bill that seems higher than it should be, you may be wondering if you’re paying too much for electricity. Here’s how to find out if your supplier is overcharging you, as well as a few tips to keep your bills on the right track. 

Reasons why an energy bill might be higher than usual

When you receive an unexpectedly high energy bill, it could be for several reasons. The first is that you’ve been using more energy than usual, for example:

  • 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

However, if your circumstances haven’t changed but your average electric bill has suddenly decreased or increased, this could be due to a few issues. 

  1. You haven’t submitted any recent meter readings. Bills are calculated using your average energy usage over a period of time. This estimated figure could be incorrect if it’s been longer than six months since you’ve submitted a reading, for example. 

  2. Your meter is faulty. If you haven’t changed your usage and the bill is based on a recent meter reading, there might be a problem with your meter. 

  3. Your supplier has raised their prices. Although your supplier should let you know if the prices have changed, there may have been a communication breakdown. You may automatically be moved from a fixed rate to a standard tariff at the end of your initial agreement, so it’s always worth asking. 

What to do if you think you’ve been overcharged

If your bill is out of the ordinary, here are a few concrete steps to take. 

  • Step 1: Take a meter reading

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 find out if you’ve been overcharged due to estimated bills, submit a minimum of four meter readings per year. This gives 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, it’s even easier – your energy supplier can 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 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.

  • 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 will come attached with exit fees; 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. 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. The average electric bill might seem arbitrary at times. Two identical homes on the same street with the same energy usage could pay vastly different amounts depending on the supplier they use. 

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 to get a refund if you’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 will 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 to refund an estimated £153 million in credit to former customers. A quick and easy way to check if you’re owed money is to look at the My Energy Credit website. 

Investigating a faulty meter

Meter readings are used as the definitive measure of energy use, so what can you do if they don’t seem right? If you suspect that your high electric bills are caused by a faulty meter, try these steps first: 

  • 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. 

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

  • 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. They’ll send an expert to test your meter. 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 upgrade to a smart meter. 

Overcharging on fixed-rate plans 

Energy suppliers often try to automatically increase the price you pay for energy by switching you from a fixed rate tariff to a standard rate. You receive a 49-day notice before the contract ends to give ample time to switch suppliers and find a better deal. The supplier will not be able to charge an exit fee if you switch during this grace period. If they try to apply an exit fee, you have every right to complain about this added charge. 

Be aware that if you’re on a fixed rate plan, your supplier also isn’t allowed to increase the price unless your tariff involves built-in, structured price changes. The only other time they’re allowed to raise the price is in response to the government raising VAT. As mentioned above, this is why it’s so important to read the fine print. 

Don’t be afraid to complain 

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.

Bjorn GriffithDec 9th 2019