By Andy Hirst
British Gas has just tried to raise my direct debit from £350 to £1,320 a month… and I almost didn’t realise they were going to do it.
Having investigated just how this happened I’ve discovered there could be thousands more British Gas customers who are suddenly going to get hit with massive increases on their direct debits and may have no idea it’s going to happen.
A major worry is that British Gas can change your direct debit to any amount it wants – the company doesn’t have to agree it with you beforehand. It just has to let you know at least 10 working days before so if you miss the email or letter telling you it’s going up, the first you’ll know about it is when the money vanishes from your account.
And, as I discovered, it’s very easy to miss that warning and the only way to challenge it and bring it down to something manageable is to phone British Gas.
It seems the problem is with customers who were switched to British Gas as a supplier of last resort earlier this year and then had to wait a long time for their direct debit to be set up.
British Gas wants everyone to not be in any debt to it at the end of each year so carries out a review after every six months and then raises the direct debit if it feels you’ll still be in debt by the end of the next six months.
Bizarrely, the unbelievably high monthly direct debit British Gas wanted me to pay would have brought in three times what the company itself estimates I’d use a year in gas and electricity.
British Gas estimated my use to be £5,722 but if I’d paid £1,320 a month for a year it would have been £15,840.
The background to all this is we had no option but to join British Gas on February 9 this year after our previous supplier went bust. It took British Gas until June to set up the direct debit. The company had sent me a bill at the end of April for £763.88 although most of that was covered by a £645.98 credit I’d built up with my last supplier.
British Gas eventually got the direct debit sorted out by June so I set it for £350 a month – £100 more than I’d been paying with my previous supplier thinking that it would cover the cost by the end of the year which I estimated to be no more than £4,000. After all, like everyone else, we are hardly turning the heating on.
On October 28 British Gas emailed me what was described as my March to October Energy Statement so I clicked on it just to see how my energy saving attempts were doing. I didn’t think it was a bill or a warning of an increase to my direct debits … just a statement to show me how things were going.
We’ve a few rooms in the house and there can be five of us here so I expect our usage to be above the average house … and it is, as it turns out we’d spent a shade over £2,000 on our gas and electricity since we joined them eight months previously.
The statement said we were in arrears by £303 so, in my naivety, thought that wasn’t too bad. I checked the figures which had mainly been provided from meter readings and it was only on a second good look at the bill I noticed a blue box to the right side which stated my new monthly direct debit would be £1,320.04 from December 10. Yes, £1,320.04!
No separate email to warn of this huge new figure and it wasn’t that easy to spot as it was under the rather bland headline Keeping You On Track.
I eventually found the section which said you could amend your direct debit online in your own account, but British Gas had already popped the £1,320.04 figure in and you’re not allowed to change it for less.
So, the only option then was to go through the agony of a phone call to try to sort it all out. It took me two hours.
The first call handler insisted on having meter readings to I did them while on the phone and our deficit rose from £300 to just over £400. My £350 direct debit was due a few days later so that arrears figure would have come down considerably then.
No matter how I tried to explain it, she kept insisting the £1,320 was correct as that was British Gas’ estimate as to what I’d use that year even though on the March to October energy statement it said clearly my projected annual cost for gas was £2,230 and for electricity £3,492 making a total of £5,722 – a third of what they were trying to charge me.
In the end she said all I could do was pay the bill every month … every penny that was owed.
But she did put me through to the wonderfully-named Ability To Pay Team and the call handler I spoke to was helpful, saw sense, accepted the amount they were trying to charge me was “crazy” but, worryingly, had no idea how it had been calculated to that sum.
We finally agreed to increase my direct debit to £420 a month – in effect they have now based it on my projected costs for 12 months from now on instead of just the next six months over winter.
That’s £5,040 a year, way less than a third of what they were trying to charge me.
The British Gas press office failed to respond to three requests for comment but I’ve been in contact with a complaints manager over my personal account and he suggested the high direct debit amount would have been reviewed again in March and would probably have then come down but it means I would still have paid over £7,380 by then. There was no indication this direct debit rise was temporary and it clearly failed to take into account my (or anyone else’s) ability to pay.
In short, I strongly believe the 12-month contract should only start once the direct debits have been set up, not once the supply starts as they will ultimately lead to a massive increase in direct debits at the first six-month review as people would not have paid the full first six months and fallen into arrears.
But, quite why mine should have jumped from £350 to £1,320 when I was just £400 in arrears just days before I’d have paid them another £350 by direct debit remains a mystery … and I’m deeply worried many people switched to British Gas early this year are about to be caught out by this over the coming weeks.
The British Gas customer service manager seemed to agree that starting the 12 months from when the first direct debit is paid, not when the supply is switched, would be better.
He wrote: “The points you’ve made are valid and I believe would truly make a better experience for our customers.”
He is now putting them forward to British Gas management.
So, if you’ve had an ‘energy statement’ by email or letter from British Gas make sure you read every word to be certain your direct debit isn’t going up to a ludicrous level.
And, if it is, act now to stop it.