Regulator Takes Action to Ban Energy Firms from Backbilling Customers
March 6, 2018
The UK’s energy industry regulator Ofgem is taking action to ban suppliers of gas and electricity from hitting their customers with bills for energy they used more than 12 months earlier.
Backbills generally result from situations in which energy suppliers haven’t accurately billed their customers for reasons to do with their billing systems or problems with gathering in accurate meter readings.
For consumers, these backdated bills can result in the receipt of sudden demands for payment of hundreds of pounds, which for many people will result in a considerable amount of stress and potentially serious debt management problems.
Energy suppliers have been signed up to a voluntary agreement that should’ve meant they didn’t bill customers for energy used more than a year before but Ofgem has said that signees of that agreement do not always adhere to it.
Ofgem has also said that some energy suppliers didn’t sign up to the voluntary agreement on backbilling so the regulator has decided to take action that ensures catch up bills can’t be issued to energy consumers after a period of 12 months has elapsed.
Its plans will see legislation introduced at the beginning of May 2018, with the aim being to encourage energy suppliers to improve their billing procedures and to protect consumers from unexpected bills.
Ofgem’s figures suggest that backbills are worth on average around £1,160.
“Large catch-up bills can leave consumers struggling financially or even in debt to their supplier,” said Rob Salter-Church from Ofgem in a statement.
“Getting billing right is an essential part of customer service, and it’s unfair that consumers should be left out of pocket when through no fault of their own they’re issued with a shock bill from their supplier.
“So we’re taking action and banning suppliers from issuing backbills beyond 12 months, where it’s not the customer’s fault. This sends a strong message to suppliers to improve the accuracy of the bills they send to their customers.”
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