Am I getting a discount...

  fourm member 09:08 24 May 2014
Locked

...or are you paying a premium?

When I started paying for my energy by direct debit, I was offered a discount because the energy companies knew they needed to pass on some of the savings they made to get people to switch.

Now, it seems, I'm no longer getting a discount. Those who pay quarterly are paying a premium.

But has anything, other than the words used, changed?

  fourm member 09:44 24 May 2014

MechKB 2

Pre-payment meters are different.

There are cost savings between paying a quarterly bill and paying by direct debit.

There can be no disputing that the energy companies make savings from direct debit payers. They wouldn't offer a lower price if they weren't providing a cheaper service. I'm sure, if they could, they would keep all those savings for themselves but the reality is they have to pass some of them on to consumers to encourage them to switch.

  Mr Mistoffelees 10:15 24 May 2014

While I understand and accept what Spider9 says, with regard to quarterly payers, people who are on pre-payment meters cannot get behind with their bill and are, mostly, among the least well-off and yet, they are being penalised.

  john bunyan 10:19 24 May 2014

Similarly if one buys , say, a new lounge suite, one is offered "free 2 years credit". If you try to get a cash discount, you cannot get it, so those who save before buying are subsidising those who buy on credit, as there is no such thing as a free lunch.

  Forum Editor 11:18 24 May 2014

MechKB 2

why are those with prepayment meters penalised?

It costs quite a lot more for an electricity supplier to operate pre-payment meters.

When you run a business the one thing you want above all else is to be able to predict - as far as is possible - a revenue stream. You can do that by getting your customers to pay by direct debit. There are enormous advantages to the DD system, not the least of which is that you collect the money automatically - you don't have to wait for the customer to pay - so your cash-flow situation is much easier to manage. It's the reason companies offer discounts to DD customers.

  fourm member 11:47 24 May 2014

I realise I can't control the direction a thread takes but my point was about the language.

Obviously a call to reduce the discount for DD payers would be unpopular so the discount for DD payers becomes a surcharge for quarterly payers.

Now you can mount a campaign against the 'surcharge'.

  fourm member 12:18 24 May 2014

MechKB 2

British Gas probably won't say it because they think you'll get upset if they do.

Part of the cost of pre-payment meters is the theft and criminal damage. That cost is spread to all pre-payment users even though not all of them break into the meter.

  spuds 12:58 24 May 2014

Yet again, this appears to be yet another case of Ofgem supporting the supplier more than the people that it is suppose to protect. But I do believe that the present government are considering making changes with the way Ofgem is conducting itself. Changes perhaps, like it as done with some of the other so called public Watchdogs.

With my dual fuel energy supplier E.oN, I have had two terms on their 'capped or fixed' price contracts. This month the last of these came to an end, so it was time to consider my forthcoming options for future supplies of gas and electricity.

Contacting E.oN this morning, and requesting their advice on their best deal proved very difficult, especially if I didn't sign-up now, 'due to possible sudden increase prices that could be pending shortly'. What was more concerning was the way things were being explained to me, on what I will or may lose, because of changes made by E.oN from my last contract.

Thankfully,E.oN is sending the new contract with a 14 day (no fee) release, that I can read. After the 14 days I will have to pay a £10 fee to cancel the contract within the next twelve months. This never applied previously.

Other incentives or reqwards I had previously are now in doubt, and it looks like I may need to apply for the return of these again. Whatever the case, the 28 minutes answering questions for a new contract, with the advisor agreeing that E.oN already had most of my information on record, didn't go down to well with me, and left me in a more confused state as to whether they were intentionally making life easier or harder for me?.

  fourm member 13:03 24 May 2014

You're right.

But now I understand that I can see immediately where the cost comes from.

The people who supply and house the Paypoint machines don't do it for love.

  spuds 13:03 24 May 2014

fourm member

Pre-payment cards topped up at various outlets providing the top-up service, stopped the theft and criminal element of the service, except perhaps if the meter was by-passed!.

  Forum Editor 13:14 24 May 2014

MechKB 2

"I have asked British Gas for a breakdown of the costs involved with prepaid meters several times yet they seem to be reluctant to provide the information and thereby justify the premium."

The company isn't under any legal obligation to supply you with information that might be market sensitive.

Lots of prepay meters have to be updated manually each time there's a change in the cost of electricity, so there's a pretty obvious cost involved right there. The smart card and top-up Key system has to be paid for of course, so there's another cost.

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