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Ofgem bans suppliers from backbilling customers beyond 12 months

Tuesday, 6th March 2018

Ofgem, which consulted on this issue last year, has decided to ban all domestic and microbusiness suppliers from issuing backbills for energy used more than 12 months ago.

Although there has been a voluntary agreement for suppliers not to backbill for past 12 months it does not protect all consumers from receiving these bills, as some of the energy providers who have signed up do not always follow this agreement.

How the backbill is calculated

Backbills can result from problems with a supplier’s billing system, or from suppliers estimating bills until they have an actual meter reading which may show that the customer’s consumption is higher than expected. Suppliers then send a ‘catch-up’ bill to recover the difference.

The end of the shock bills

These ‘shock bills’, which average £1,160, but are known to be higher can leave customers struggling financially or even in debt. Extreme cases have seen backbills in excess of £10,000.

When backbilling is accepted

Suppliers can still backbill customers past 12 months where the customer’s behaviour is obstructive, such as blocking physical access to a meter, or manifestly unreasonable, such as tampering with a meter or stealing energy.

Should consumers provide meter readings?

Consumers will not be at fault for failing to provide meter readings. Suppliers will need to assess consumer behaviour on a case-by-case basis. Suppliers are allowed to chase unpaid bills that they have previously sent in compliance with their obligations.

Smart meters are taking over

As smart meters are rolled out across the UK, suppliers will no longer need to rely on estimated bills and send catch-up bills to customers. Suppliers have obligations to make sure they use the technology, once smart meters are installed, to improve services for customers for example by providing accurate billing.

Date for new rule on backbilling

The new rule on backbilling will come into effect at the beginning of May for domestic consumers and in November for microbusinesses.

You can read the full Ofgem press release here

Related reading

If you need to complain about your gas or electricity supplier then we have produced a simple to use three step guide to help you.

How to complain to your gas or electric provider






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