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£5,700 Energy Bill Cancelled Due to Supplier Noncompliance

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A £5,700 energy bill was cancelled due to supplier noncompliance, highlighting the issue of back billing and its consequences for consumers.

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£5,700 Energy Bill Cancelled Due to Supplier Breaking Rules

Hayley Jarvis was shocked when she received a £5,768.09 bill in early January for energy from two and a half years ago. ‘The bill, known as ‘back billing,’ is a practice where an energy supplier issues customers with a new bill for energy used more than 12 months ago.’

DATACARD
Understanding Back Billing: A Financial Concept

Back billing is a financial practice where a service provider or utility company charges customers for services used during a previous period.
This occurs when the customer's payment is delayed, and the provider continues to provide services without receiving immediate payment.
Back billing helps providers recover costs and maintain cash flow.
It can be applied to various services, including electricity, water, gas, and internet.
In some cases, back billing may lead to additional fees or penalties for late payments.

What is Back Billing?

Back billing is against Ofgem regulations and was banned in 2018. According to Ofgem, you do not have to pay any money sent on a new bill for energy used more than 12 months ago. ‘If you receive a back bill, it’s essential to contact your supplier immediately.’

DATACARD
Understanding Ofgem: The UK's Energy Regulator

Ofgem is the Office of Gas and Electricity Markets, a public body responsible for regulating the energy industry in the United Kingdom.
Established in 1999, Ofgem ensures that energy suppliers operate fairly and transparently.
Its key functions include setting price controls, monitoring supplier performance, and protecting consumer rights.
According to Ofgem's annual report, over 80% of UK households are supplied by licensed energy companies, with an average annual household spend of £1,300 on energy bills.

The Consequences of Back Billing

Hayley Jarvis is not alone in receiving a back bill. Radio 4’s Money Box has learned that 3,308 people complained to the energy ombudsman about receiving these so-called ‘back bills’ in the 12 months to September 2024. The actual number of people complaining about back billing is likely to be much higher.

vulnerable_consumers,ofgem_regulations,energy_bill,consumer_protection,back_billing,supplier_noncompliance

Citizens Advice Weighs In

Alex Belsham-Harris from Citizens Advice emphasizes that it’s vital for Ofgem to intervene and ensure energy suppliers follow the rules. ‘These bills shouldn’t be sent out in the first place,’ he says. ‘Once someone does identify this as an issue for them, if they get in touch with their suppliers then that should be the end of it.’

Supplier Response

The company that sent the back bills to both Hayley and Matt was E.On Next, which is part of the E.On group. ‘E.On told the BBC that human error led to a back bill being sent out in Hayley’s case, adding that they have apologized and are reviewing their back billing processes.’

A Warning for Vulnerable Consumers

Hayley Jarvis’ main concern is for people who might get these bills and not be willing or able to fight them. ‘You could have elderly, or vulnerable or isolated people who would see this [the bill] and think, ‘Oh no, I need to pay this.’ There’s nobody there to tell them, ‘Actually, you don’t owe this money, over 12 months have passed.”

What to Do If You Receive a Back Bill

If you receive a back bill, it’s essential to contact your supplier immediately. Citizens Advice suggests writing to or emailing the supplier to explain and has provided an example letter that people can use as a template.

DATACARD
Citizens Advice: A Guide to Consumer Rights

Citizens Advice is a UK-based charity that provides free, independent advice to individuals on consumer rights.

According to their annual report, they handled over 2 million cases in 2020 alone.

Their services include debt advice, housing support, and help with consumer complaints.

In 2019, Citizens Advice helped consumers recover £1.3 billion in refunds and compensation.

They also provide online resources and tools to empower individuals to make informed decisions about their rights.

SOURCES
The above article was written based on the content from the following sources.

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