Almost 1.3 million energy customers have been overcharged a total of £102 million – the equivalent of more than £79 each – as a result of billing errors by energy companies over the last year, according to new research from uSwitch.com, the price comparison and switching service.
Nearly one in three (28%) of those affected said that they were charged for an amount that didn’t match the meter readings they had supplied, while a quarter (26%) said that their bill didn’t add up correctly. Other billing blunders include suppliers getting direct debit amounts wrong (8%), applying incorrect fees (7%), getting tariff or product details wrong (5%) and muddling bills up with someone else’s (5%).
To make matters worse, consumers have then faced lengthy waiting times to resolve the billing blunders. On average, it took those affected 35 days to get a refund, with one in ten (9%) waiting between one and two months to get their money back and almost a third (28%) waiting more than two months to be repaid. A further 7% are yet to receive a refund, 4% are still trying to get the issue resolved and 3% have given up chasing their energy company, saying they never got their money back at all.
The cost of billing errors may be even higher, since over a quarter of consumers (27%) admit to not reading their energy bills at all or just reading how much they have to pay and little else. A fifth (21%) of this group say they don’t read their bills because they don’t understand them. Poor understanding of energy bills leaves consumers at greater risk of not spotting any errors their supplier might have made. As well as missing important information relating to how much they pay, including whether the bill is based on an estimated meter reading, if the account is in credit or whether a cheaper tariff is available.
Claire Osborne, energy expert at uSwitch.com, comments: “Customers having to pay the price for suppliers’ mistakes is unacceptable. Households are already feeling the pinch from recent energy price rises, and having to chase for an average of 35 days to get their money back simply adds insult to injury. 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.com is calling for Ofgem, together with energy suppliers, to improve the design of energy bills and ensure they do more to get the message through to energy customers about what they’re paying. This should boost customers’ understanding of the contents of their bills, and help them to spot supplier mistakes. In addition to explaining how the bill was calculated, energy bills should clearly show:
- A clear explanation on whether the bill is estimated or based on actual meter readings
- A clear explanation on whether the customer must take any action after receiving the bill
- An alert to the customer if they are on a standard variable tariff
- A clear and prominent reminder that the customer could save money by switching tariff or supplier
- A prominent QR code and clear information on how to use it to get a price comparison
- The date when the customer can switch without paying an exit fee.