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Why am I being forced to change my Direct Debit?

S
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Anyone else being forced to change their direct debit due to 'impending debt'?
Apparently OVO don't think my current direct debit level will cover the final amount owing for the year, so they've already sent me two letters from their Collections Department, talking about 'how much debt' they think I will have if I don't rectify my payment. Bear in mind I haven't missed a payment and have been pretty good at giving monthly readings, so I'm not in 'debt', as they so succinctly put it, they just think I will be, despite the 'shortfall' being quite manageable.
OK, so I acquiesce to this veiled threat from Collections and attempt to increase my direct debit payment. But it turns out I can't choose what that level is, they decide based on what they think I'm going to owe.
This would be great, however their projections for what they think my overall useage will be have been found to be wildly inaccurate.

OVO, I'm a grown-ass man, I think I should be allowed to decide whether I think I need to change my direct debit payment and to which level - or, conversely, receive a bill at the end of the year to cover any shortfall - it should be my choice.

Undoubtedly you will come back and regale us with the usual corporate flannel - 'well we do this to protect the customer form big bills', 'we've only got your best interests at heart', 'some people don't like being surprised by a big bill at the end of the year'.

I've got to say, I switched from British Gas for a similar reason (and received a massive payment at the end for their continued incompetence regarding estimated bills), but my experience thus far has not been much better, which is a damning endictment given the corporate ineptitude that British Gas display daily.

As an aside, the app is still rubbish. You've been trying to fix the thing for months now, to no avail. Maybe funnel some resources in to interface management as opposed to haranguing customers for mythical debt.

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Best answer by Lucy_OVO 17 August 2017, 17:51

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Lucy_OVO
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Updated 06/10/23 by Emmanuelle_OVO

How Direct Debits work

 

A Direct Debit is an automatic monthly payment set up with your bank or building society. It means you can choose which day you want the payment to go out each month, and your bank will sort the rest.

Once a Direct Debit is set up, you don’t need to do anything else.

It’s often the best way to make regular payments, such as your energy bill.

 

Why paying by Direct Debit is the best way to pay

Direct Debit is usually the best way to pay bills because:

  • you get a cheaper rate if you’re on our variable Simpler Energy plan
  • you don’t have to think about it – it’s all done automatically each month
  • you don’t need to worry about forgetting or missing a payment
  • it can help you budget as you know how much is going out of your account each month and when
  • it spreads your year’s energy costs evenly over 12 months

 

How we work out your payment amount

To work out your monthly Direct Debit amount, we:

  • look at your energy use to date and how much you’re likely to use until 31 March, or the end of your contract if you’re on a fixed plan
  • take into account your current balance and any other costs such as the standing charge and any add-ons you have
  • divide the amount by the number of payments left until 31 March, or the end of your contract, and that gives us your monthly amount

Our aim is to make sure you don’t build up unexpected debt by the end of winter, or the end of your contract if you're on a fixed plan.

 

Why your Direct Debit amount might be different to your bill amount

How much energy you use can change from month to month, so your actual bill might be a different amount to your Direct Debit amount.

But we make sure you’re paying the right amount each month to cover your whole year’s energy use, spread out over 12 monthly payments.

 

Why meter readings are important

You can make sure your Direct Debit amount stays at the right level by giving us regular meter readings – once a month is best.

 

How we work out your Direct Debit amount when you join us

If you’re new to OVO, we work out your Direct Debit amount to cover your expected energy use over the next 12 months. We base it on your past year’s energy use if you know it.

If we don’t know it, we’ll ask you about your property and how many people live there, then we’ll base it on the average data for your type of household.

After 2 months we check in to make sure the amount you’re paying is right for your actual energy use. Your Direct Debit amount might then need to go up or down.

 

How often we check you’re paying the right amount

We review your Direct Debit every 3 months to make sure you are not paying too much or too little for the energy you’re using.

We let you know if your Direct Debit amount needs to change to keep you on track.

 

When your payment amount might change

Your payments might need to go up or down if something changes, such as:

  • your energy use goes up or down
  • the price of energy goes up or down – if you’re on a standard variable tariff
  • you change which energy plan you’re on
  • you missed a payment or recently requested a refund
  • you’ve chosen an add-on, such as Greener Energy or OVO Foundation

If your Direct Debit is too high or too low, then we’ll let you know we’re going to have to change the amount.

 

If your balance is in credit

It’s good for your balance to be in a bit of credit as it acts like a pot of money to cover when your energy use is higher.

For example, you’re likely to build up credit in the summer months when energy use is lower, but you might need to tap into your credit in the colder and darker winter months when energy use can be much higher.

We check you’re paying the right monthly amount so your balance stays on track for the whole year.

Even if your balance is in credit, it might be that we still need to increase your monthly payments. This would be if we’ve worked out what your energy use is likely to be and that your balance is likely to go below zero by the 31 March or end of your plan.

 

If your balance goes below zero

If your balance goes below zero, we’ll let you know if your monthly Direct Debit amount needs to go up.

 

If you’re struggling to pay your bills, we can work it out together – sign up to our payment support tool.

 

Setting up or changing a Direct Debit

You can set up, change the amount or date of your Direct Debit by logging into your online account and following these steps:

  • Go to Home
  • Select Set up your Direct Debit
  • Choose which day you’d like us to collect your payment each month. This can be any date from the 1st to the 28th
  • Enter your Direct Debit amount. You can use our Direct Debit calculator to get an accurate prediction of what you should pay each month
  • Put in your details, including your full name, sort code and bank account number
  • Select Next
  • Check the details you’ve entered are correct
  • Select Confirm payments

We’ll send you an email within 3 working days to let you know it’s all set up.

Find out how to set up or change a Direct Debit in the app.

 

Check out our Direct Debit “check in” process here or watch the video below for more info on the direct debit review process for fixed plans:

 

 

 

You can check your current Direct Debit amount and adjust this if needed on the ‘Payments’ page of your online account or OVO app (download for Android or iOS) -

 

Exact appearance may vary

 

There’s also some really helpful advice here in understanding the calculation we carry out when checking your Direct Debit amount -

 

Exact appearance may vary

 

 

 

Is there any support available if I’m struggling to pay for my energy?

 

There is help available if you’re struggling to pay your energy bills – both from us here at OVO Energy and from government schemes and charities as well.  There are many ways we can help – such as setting up a payment plan for you, which spreads the cost of your energy to make it more manageable. If you want to find out about payment plans, you can request one online here – we’ll take you through what you need to do, and ask you for some details. Our dedicated team is also specially trained to support you. They can make sure you’re receiving any financial assistance from the government that you’re eligible for, and take you through payment support schemes that are available. 

 

You can find out more about these schemes and where to seek free, independent advice right here.

 

You guys know what’s watt
G
Rank

Why is it that energy companies always send bills just in time for the weekend and then you can’t get through to anyone to discuss the enforced pay increase! I was waiting for over 1.5 hours and then got cut off! Weekly opening times are when we’re working as no late opening! 
You knew you would be inundated with calls from concerned bill payers and yet we’re left hanging for hours!

What if all the customers cancelled their DD and waited for you to make the contact? Is that an option as I don’t wish to be forced in increasing my payments when my circumstances have changed and there’s one to talk to!! 

 

M
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Badge +1

Cancelling the Direct Debit will, at October 2022 prices, cost an average user over £200 on the standard credit (rather than direct debit) tariff per year.  I do not recommend you do that.  It would only make a bad situation worse.

 

The latest price cap announced recently, to commence in October, are for the mythical average customer, an increase of 80% on the current (already very high) rates.  Its no surprise that customers bills will increase and their direct debits as a consequence to rise dramatically.  Unfortunately saying I can’t afford will not make any difference.  If you want to challenge the DD computation you need fact and figures.

Eon and EDF customer. Don't think smart meters are worth the expense.
Blastoise186
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Hi @gracekennedy ,

Live Chat is open today until 1PM, which you can access via https://help.ovoenergy.com . Alternatively, try 0800 069 9831 which I think is open until 2PM today.

Securing energy by zapping security bugs... For that is The Blastoise Way!
I
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OVO have “suggested” I increase my direct debit amount, despite being over £900 in credit- can I just leave my amount at its current level? At least until I am at £0?

Blastoise186
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Userlevel 7
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Hi @isatkinson ,

You do have this option but you’ll need to call OVO to request a three month Direct Debit freeze. The Collections Team can arrange this for you, if you call 0800 069 9831 they can discuss whether this is the right move.

Securing energy by zapping security bugs... For that is The Blastoise Way!
Emmanuelle_OVO
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Userlevel 7

Hi @isatkinson,

 

Welcome to the OVO online community.

 

I can see you’ve already met @Blastoise186 one of our volunteers. Great to see our community members giving you some tip-top advice. 

 

Just wanted to step in here and add; if OVO are suggesting you increase your direct debit it sounds like you may have recently fixed into a new plan on the higher rates or are on the Simpler Variable Plan with prices set to go up in October. 

 

Here are some resources you may find helpful:

 

 

The direct debit review takes into account any credit balances you have on your account. If you are on a fixed rate contract it is worked out to ensure when your plan comes to an end there is a £0 balance on your account. 

 

If you are on the Simpler Variable Plan it is worked out over an annual period to ensure there are no large spikes in your bill over the winter period. 

 

We know that direct debits aren’t for everyone and if you would prefer to pay on receipt of your bill you can opt to go onto the Simpler Variable Plan on demand plan. It is more expensive than the Simpler Plan paid by direct debit. 

 

It is worth mentioning you can request a refund up to £500 at any time through your online account as long as the following are met:

  • Have been billed within the last 28 days to an actual reading

  • Have an active Direct Debit with at least one payment received from that bank account

  • Request a refund of over £5

  • Request a refund up to £500

  • Leave a remaining balance of at least one month's Direct Debit

 

Refunds can be requested through your online account by following these steps:

  • Go to the Payments tab and click 'Apply for a refund'

  • Choose the amount you wish to have refunded

 

Keep us posted with how you get on! 

Renewable Energy? Big Fan.
H
Rank

I live in a one bedroom flat where I don’t pay for heating / hot water etc I pay a separate service charge for this… I have an OVO smart meter and my direct debits are increasing every month started £21 / £25 / £27 / £30 it’s now £34 but I received an email from OVO wanting to put it to £50 a month (even though I’m £104 in credit) and this is before the next rise in October… I hardly use any electric I don’t have a washing machine, I hardly watch TV, I wheel round in the dark (manual wheelchair user) why is it so high???

apparently after looking into it my standing charge atm is 41.32p a day / price per kw is 27.10p a day

im scared I can’t afford another rise especially when I’m not using anything, no tv, or lights - obviously I use air fryer to cook but at this rate won’t be able to afford that either :( 

 

do these figures seem right?? I don’t have anyone really to compare too…

nealmurphy
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Hi @hayoborn 

Thanks for all the useful information. The users of this forum should collectively be able to advise what your costs should be.

What would be useful, if you know it, is your annual usage in kWh. And if you have it, the split month by month over the last 12 months. I'm guessing your usage doesn't vary as much as others if heating isnt included in your bill. This information should help advising what your DD should be set at moving forward.

H
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Last years KWh usuage was about 850-900… when I asked the advisor today she said over 12 months I’m likely to use 1,143 kWh this year (rolling 12 months)

Jeffus
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Last years KWh usuage was about 850-900… when I asked the advisor today she said over 12 months I’m likely to use 1,143 kWh this year (rolling 12 months)

@hayoborn

There is a lot of advice we can give, so lets start by getting a better idea of your usage. There is lots of government help with costs, but lets look at your basic usage and costs first. OK? 

If you log onto the website, not the app and look at this page, you will see something called Future Annual Consumption. This is what OVO use to calculate your direct debit. It updates gradually over time as you change the amount of electricity you use. 

https://account.ovoenergy.com/plan

Here is mine for example

What do you see for Future Annual Consumption? Something like 1143 which was the figure OVO told you?

Also on this page you will see the unit rate and standing charge figures. These are excluding VAT. So you would need to add 5% to these to get the total cost. These are the rates up till end September. They haven't updated the rates on this page for the 1st October prices if you are on the Simpler Energy plan. What do you see on this page for the unit rate and standing charge?

Also on this page you can see the name of your plan, does it say Simpler Energy like mine? 

H
Rank

Last years KWh usuage was about 850-900… when I asked the advisor today she said over 12 months I’m likely to use 1,143 kWh this year (rolling 12 months)

@hayoborn

There is a lot of advice we can give, so lets start by getting a better idea of your usage. There is lots of government help with costs, but lets look at your basic usage and costs first. OK? 

If you log onto the website, not the app and look at this page, you will see something called Future Annual Consumption. This is what OVO use to calculate your direct debit. It updates gradually over time as you change the amount of electricity you use. 

https://account.ovoenergy.com/plan

 

 

@Jeffus 


Here is mine: 

 

Jeffus
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Userlevel 7
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@hayoborn

OK. So prior to the 1st October changes you would be paying something like

365 x 0.4132 x 1.05 (VAT) = £158.36 in Standing charges

1142 x 0.271 x 1.05 (VAT) = £342.96 in usage costs.

So something like £501.32 a year or £41.78

Assuming you have something like £104 in credit, you would have needed to pay over the next year something like

£501.32 - £104 = £397.32

So about £33.11 a month, which is in line with the £34 pound OVO were asking for. Does that make sense? 

As you have probably heard, energy is unfortunately going up in October. It was going up a lot... but the government have capped the unit rate, but not the standing charge. So you will need to up your direct debit. OVO are in the process of updating everyone's direct debit, but it is difficult to be certain exactly what figure everyone has been given at the moment. When i asked yesterday OVO said the new unit rates and standing charges would be available today. 

We can work out a very good estimate for you in the meantime if you like? 

The money saving expert website has a great calculator. 

https://www.moneysavingexpert.com/utilities/what-are-the-price-cap-unit-rates-/#tool

You simply enter your usage, 1142, and select the region you live in. It is great as it uses the regional price cap rates and the government Energy Price Guarantee. The price of electricity varies depending on which part of the country you live in. It is unlikely OVO will charge much less than the regional price cap with the Energy Price Guarantee. 

What figures do you get from the calculator? 

There is some good news we can talk about after that. 

 

 

 

H
Rank

@Jeffus 

here that comparison is: also I went back over my usuage this year and in March my usuage was going over £1 a day where as before March wouldn’t be anywhere near that… I don’t understand why it’s so high when I don’t pay for heating / hotwater - all my lights are eco friend bulbs - I hardly watch tv… at the moment I’m scared to do anything…

 

 

Jeffus
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@Jeffus

here that comparison is: also I went back over my usuage this year and in March my usuage was going over £1 a day where as before March wouldn’t be anywhere near that… I don’t understand why it’s so high when I don’t pay for heating / hotwater - all my lights are eco friend bulbs - I hardly watch tv… at the moment I’m scared to do anything…

 

 

Hi @hayoborn OK.

So lets see if we can answer that question. Electricity unfortunately been going up for a long time now. Your bills and direct debits would have gone up at the same time. 

The price you pay for your electricity would have gone up in October 2021, then April 2022 and now in October 2022. Your direct debit will have gradually increased over that time as you have seen. Winter months you will see the biggest increase in cost. 

I know it is not great, but I hope that makes sense? I could do some calculations about each of the increases in October as 2021, April 2022 and October 2002 but i am not sure it will help you. Basically there has been a dramatic increase gradually over the last year as you have seen. Also standing charges have gone up a lot, particularly for electricity unfortunately to cover things like failed suppliers. 

So lets look at the figures on the Money Saving Expert Website. 

They won't be exact, and it may be your home is in a slightly different region to the one you think it is (some of the borders  used may not be obvious). 

Anyway, the current year cost they estimate is £480, so pretty close to the £501 we worked out. We could try and get more accurate figures, but it is probably not worth it at the moment given OVO will update us all. 

The next 12 months money saving expert estimate £550, so lets say that is actually £580 over a year for now given their figure for this year looks a bit low. So that would be £48.33 a month. 

£580 / 12 = £48.33

But you have about £104 in credit. 

£580 - £104 = £476

£476 / 12 = £39.67

So about  £39.67 a month. 

The good news is the government are giving you £400. OVO will put this in your bank account over the next 6 months. 

So over the next year you are paying only  around

£476 - £400 = £76 

for your electricity in total for the whole year. So dramatically less than this year. 

OVO will put the following in your bank account

October £66

November £66

December £67

January £67

February £67

March £67

A few days after you have paid your direct debit, OVO will put the money in your bank account. 

You may also get other support, for example if you get Personal Independence Payments or something similar you will get £150 from the government paid into your bank account in September. 

I hope that helps. Probably best to see what OVO tell us all today and over the next few days to get more accurate figures. 

We should be able to see our new unit rates and standing charges after the 1st October at the very latest on the plan page

https://account.ovoenergy.com/plan

So you have been an OVO customer since 2018? Do you get the Interest Reward on your credit balance? 

Emmanuelle_OVO
Rank
Userlevel 7

Hey @hayoborn,

 

Welcome to the OVO Online Community. 

 

It’s great to see our community members giving you some really helpful advice here!

 

It’s a difficult time, and energy prices have increased significantly. Which means the majority of customers will see a large increase in their monthly costs.

 

We have plenty of advice and support available. Check out this great guide about the price increases and how OVO can help their customers here:

 

 

The government have recently announced the Energy Price Guarantee to cap average household energy bills at £2500 a year from October. The support will be available for two years and is in addition to the £400 rebate.

 

We’re currently working through what these announcements mean for us, and our customers. We’ll be in touch with all of our customers to let them know what will be happening to their energy bills.

 

For now, the advice is; If  you’ve received any Direct Debit review letters or a Price Increase Notification letter, you should ignore it and wait for a new one to be issued. 

 

Hope this helps. 

Renewable Energy? Big Fan.
H
Rank

@Jeffus

here that comparison is: also I went back over my usuage this year and in March my usuage was going over £1 a day where as before March wouldn’t be anywhere near that… I don’t understand why it’s so high when I don’t pay for heating / hotwater - all my lights are eco friend bulbs - I hardly watch tv… at the moment I’m scared to do anything…

 

 

 

So you have been an OVO customer since 2018? Do you get the Interest Reward on your credit balance? 

 

@Jeffus 

I’ve been with OVO since 2021 I believe it was SSE before that… what is the interest reward? I really appreciate your help :) so the £400 from OVO will go into bank account rather than on my balance with OVO

Jeffus
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Userlevel 7
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@Jeffus

I’ve been with OVO since 2021 I believe it was SSE before that… what is the interest reward? I really appreciate your help :) so the £400 from OVO will go into bank account rather than on my balance with OVO

 

Yes, the £400 goes into your bank account for Direct Debit customers. OVO have decided to do that rather than put it on your OVO balance. Useful to know as soon as you pay what might seem a large direct debit, a few days later you will get some money back. So perhaps save a lot of that money up as the payments are only for 6 months. I'd also personally recommend keeping a reasonable credit balance on your OVO account so you don't have to worry too much about any future increases. Remember we did the calculations based on using up your current credit balance over the next 12 months. 

Ah OK, i assume you were one of the SSE customers automatically transferred to OVO, you don't get the interest reward. The scheme was withdrawn last year for all new customers including those from SSE.

There is additional automatic help if you are a pensioner or some people on  means tested benefit. These will automatically be paid into your bank account by the government if they apply.

We can always check the figures again once OVO have emailed us all about our new unit rates, standing charges and direct debits if it helps.

The good thing is that the unit rates and standing charges are guaranteed not to increase until  Oct 2023 in two years time so this should help with budgeting. There is no guarantee unfortunately that the Government will give everyone another £400 next winter. 

H
Rank

@Jeffus 

my neighbour has the exact same setup as me one bedroom flat and doesn’t pay for heating / hot water and she HAS a washing machine and watches TV constantly…

she is on the same tariff as me but only uses 758kwh a year…

I don’t understand why mine is so high in comparison 

Jeffus
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@Jeffus

my neighbour has the exact same setup as me one bedroom flat and doesn’t pay for heating / hot water and she HAS a washing machine and watches TV constantly…

she is on the same tariff as me but only uses 758kwh a year…

I don’t understand why mine is so high in comparison 

Hi @hayoborn 

It can be hard to find out why some people use more electricity. For example it could be your fridge is less energy efficient. So i would be wary of trying to compare. 

The Future Annual Consumption figure was set a bit high initially for some ex SSE customers.

You might find this gradually comes down as the system realises how much electricity you use over a full year. Take a look at the figure once a month, it gradually updates. 

https://account.ovoenergy.com/plan

You only pay for energy you use so it is not an issue, it just means you might build up a bit more credit. You might actually find you use close to your neighbours. 

Ofgem quote the typical domestic electricity use for a one bed flat as 1800kWh a year. So your usage is very low, not surprising given what you have said. 

Take a look at this page, do you see a smart meter reading every day? 

https://account.ovoenergy.com/meter-readings/history/electricity

 

Do you know what date you transferred to OVO? Have you been with OVO over a year yet? 

H
Rank

@Jeffus 

 

10th Aug 2021 my smart meter reading was: 05042

10th Aug 2022 my smart meter reading was 05981

Difference total = 938

Jeffus
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Userlevel 7
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@Jeffus

 

10th Aug 2021 my smart meter reading was: 05042

10th Aug 2022 my smart meter reading was 05981

Difference total = 938

I suspect you will find the Future Annual Consumption estimate gradually gets closer to that, if your consumptions remains stable. They are pretty close based on experience so  nothing to worry about. 

They are never exactly the same for anyone. Mine for example is 2433 vs 2390 but i have been an OVO customer for longer. 

I suspect your consumption will never get as low as your neighbour says theirs is. 

Emmanuelle_OVO
Rank
Userlevel 7

Hey @hayoborn,

 

Great to see our community members giving you some tip-top advice here. 

 

Even if your estimated annual consumption was higher than your actual usage, as you’re on a smart meter your account balance will be accurate.

 

If you aren’t currently on half hourly readings, I'd advise getting this updated so you can make the most of our OVO greenlight tool and live billing system. For more information we have a great guide here:

 

 

If you think your usage is too high, it may be that you have an appliance in the property that is using more energy than it should, or that your meter is clocking to much consumption. We have a guide about this topic you might find useful:

 

 

Hope this helps.

Renewable Energy? Big Fan.
H
Rank

@Jeffus

 

10th Aug 2021 my smart meter reading was: 05042

10th Aug 2022 my smart meter reading was 05981

Difference total = 938

I suspect you will find the Future Annual Consumption estimate gradually gets closer to that, if your consumptions remains stable. They are pretty close based on experience so  nothing to worry about. 

They are never exactly the same for anyone. Mine for example is 2433 vs 2390 but i have been an OVO customer for longer. 

I suspect your consumption will never get as low as your neighbour says theirs is. 

@Jeffus 

 

i received an email this morning with the new prices per kWh and standing charge etc, how can I roughly work out how much I will be charged now… 

 

sorry to sound dumb I don’t really understand it, but the way you word things etc has been very helpful :)

M
Rank
Badge +1

Multiply the standing charge by 365 days.  Multiply the unit charge by your forecast consumption.  Add those two figures together to get you forecast annual bill.

If you pay by fixed monthly Direct Debit, add to that total your current account balance if it's a debit, or subtract it if it's a credit.  Divide the new grand total by 12 and that is an approximation of your likely direct debit amount.

Eon and EDF customer. Don't think smart meters are worth the expense.

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