Why has my Direct Debit amount changed?


Userlevel 7
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Direct Debit reviews are super complex – and a hot topic here at OVO!

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163 replies

Userlevel 5
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Hi all.

My understanding of direct debits changing was to ensure we as customers end up with a balance of £0 at the end of the contract.
Whilst we are charged based upon our usage, it is likely that this will fluctuate during the contract, resulting in changes being suggested/made to the direct debit.

I hope I have explained myself clearly, and am on the right path in terms of why a change is necessary.
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I have had no real issues with changes to direct debits. I tend to build up credit in the Summer months to pay for the higher usage in the Winter months. My direct debit was reduced once by Ovo as I was building up too much credit. Other changes I have made myself based on what Ovo recommends.
My only concerns are related to how OVO estimates my consumption over the standard period when the Smart Meter fails to communicate (like mine) and I have to submit readings at other dates. I am also happy to build up a surplus during the summer since bank interest is so low
It's very difficult to predict annual gas usage with gas heating, because this will vary hugely with a cold winter. I've kept monthly usage figures since 2010, the last unusually cold winter, and I assume that OVO's predictions are based on average temperatures. I keep my own running annual usage each month, and I happen to think that my own predictions are better than OVO's, since I know about changes I'll be making with energy saving measures. They don't. I prefer to retain as much control as possible over direct debit amounts, but generally I've found the recommended amount to be about right.
Userlevel 1
One of the very important issues that led to me becoming an OVO Energy customer was due to adjustable direct debit payments. E-on completely screwed up my account to such a level that the Ombudsman for energy became involved.
I personally do not wish to have any variable direct debit payment products. I require to know exactly how much will be leaving my account each month. In fact I would consider switching if this option is adopted by OVO Energy. It leads to too many errors and too much unnecessary communication being required to correct those errors, usually by the customer.
I prefer to overpay throughout the summer, accumulate enough to possibly make a withdrawal if the amount is excessive, then erode any remaining surplus during the high usage periods.
Please assure me that my current fixed direct debit payment will not be changing.
John L Edis.
One of the very important issues that led to me becoming an OVO Energy customer was due to adjustable direct debit payments. E-on completely screwed up my account to such a level that the Ombudsman for energy became involved.
I personally do not wish to have any variable direct debit payment products. I require to know exactly how much will be leaving my account each month. In fact I would consider switching if this option is adopted by OVO Energy. It leads to too many errors and too much unnecessary communication being required to correct those errors, usually by the customer.
I prefer to overpay throughout the summer, accumulate enough to possibly make a withdrawal if the amount is excessive, then erode any remaining surplus during the high usage periods.
Please assure me that my current fixed direct debit payment will not be changing.
John L Edis.


Hi @johnledis,

Thanks for your post.

Generally speaking, your Direct Debit amount is fixed. Meaning we'll estimate your usage for the year - either based on your previous usage, or the information you provided during sign up if you're a new customer. We'll then calculate how much this will cost and divide it into 12 equal monthly payments.

As you say, this should mean you build up a large credit balance during summer, which will then be used up in winter.

However, if your actual usage falls too much out of line from what we'd estimated, we'll review the Direct Debit and suggest a new amount to cover what we now think you'll use.

I hope this answers your question.

Thanks,
Max
After just joining Ovo after my parents have used very successfully over the past few years, I was a bit shocked to have my estimated DD set to £82 a month. I did query this over the phone but all I was told was that it will sort itself out over time.

It is a brand new house with all the insulation you can imagine, 2 bed semi, and just me living here.

I would have thought that on average, it would be about half the £82 a month I should pay. Plus I cannot see any usage as British gas / Ovo are dragging their heels about finalising bills, even through British Gas have sent me final bills for gas and electric.

So no way for me to see how much I am using per month, while still paying £82 by DD each month! :(

Steven
While setting the monthly payment as the estimated annual cost divided by 12 seems a crude approach (especially given the real usage information available from smart meters), paying the same each month makes budgeting easy. Variable demands under DDs can quickly become a nightmare as johnledis observed.

I suspect that a "pay as you go" basis may bear greater administrative costs and entail cash flow/reserve issues for the supplier as well as uncertainty, confusion and unexpectedly high payments for the user.

So overall, I'm happy with the approach given the existing safeguards.
Userlevel 1
Thanks for your support on the matter of variable direct debits everyone. Falkirk81, you will start with an estimated monthly amount based upon an average two bed house, derived by information collated by OVO existing customers. This seemingly high amount will go down over a two year period, as you collect accurate usage figures. Use the graph of usage associated with the smart meter software, assuming that you have access to the on line, live usage. This graph gives two levels of calculation, the lower will usually be the recommended by OVO, whilst the upper should be your actual amount. It's worth remembering that any surplust or overpayment will be subject to better interest than most high street banks. Two years ago I was paying £161 per month, I am now down to £140 in spite of increased costs. I am considering reducing this by a further £5 per month, and will still have a surplus. Hope this helps with your situation, and good luck getting out of the grip of BG.
John L Edis
After just joining Ovo after my parents have used very successfully over the past few years, I was a bit shocked to have my estimated DD set to £82 a month. I did query this over the phone but all I was told was that it will sort itself out over time.

It is a brand new house with all the insulation you can imagine, 2 bed semi, and just me living here.

I would have thought that on average, it would be about half the £82 a month I should pay. Plus I cannot see any usage as British gas / Ovo are dragging their heels about finalising bills, even through British Gas have sent me final bills for gas and electric.

So no way for me to see how much I am using per month, while still paying £82 by DD each month! :(

Steven


Hi @falkirk81,

Just to add to @johnledis's point, if you have an annual usage history from British Gas, we can use this to re-estimate your Direct Debit amount. Otherwise as John said, the recommended DD amount will adjust itself as we begin to receive actual usage figures.

You'll normally receive a first/final bill around 6 weeks after your switch. If it's been over this, you can send me a private message and I'll look into it. I'll need your full name, account number and date of birth.

Thanks,
Max
Userlevel 4
Badge +1
I'm not too concerned by this, as the level set is acceptable - probably due to being an OVO customer for a few years now, so there is enough usage data to establish a relevant DD payment. Equally, I'm not concerned by any minor levels of over-payment in the summer months, as I understand that any excess balance accrues 3% interest, which is better than banks pay - so potentially overpay more and gain the interest!!
[quote=Tim_OVO]



Direct Debit reviews are super complex – and a hot topic here at OVO!

Lots of things affect your review or payment amount, like how long you’ve been with us, your predicted energy use vs your actual use, and even the weather! To help you answer all your questions around Direct Debit reviews, we’ve created a topic just for that, packed with useful info which we think will be really helpful.

If you don't see an answer to your question, share it below so others can help you. Our moderators will also be on hand to step in if needed. So go ahead, get posting and sharing!
Userlevel 7
Badge +2
Hi @HelenJ

Thanks for signing up to the forum and checking out this topic. Did you have a question at all? I can see you have shared Tim's original post, but I just wanted to check if there was anything else you needed to know or wanted to query about your direct debit?

If you do, get posting below and either us or another user can help you out!

Thanks

Darran
I had a fixed price contract for a year but kept getting asked to increase the amount of the direct debit by £1 or so as recommended but at the end of the year I was £44 in credit even though the amount was not increased. I asked for and got a refund.
Userlevel 7
Badge +2
I had a fixed price contract for a year but kept getting asked to increase the amount of the direct debit by £1 or so as recommended but at the end of the year I was £44 in credit even though the amount was not increased. I asked for and got a refund.

Thanks for sharing @HelenJ - how odd for us to suggest a £1 increase :?

Ending with a £44 credit balance isn't a bad result. Not sure of the details, but it looks like that recommended increase wasn't necessary. Maybe your usage in the last few months was less then expected, or your property average is yet to adjust to your latest usage habits.

Whatever the cause, if you're still getting prompted by unnecessarily small Direct Debit changes, drop me a PM with your account number, name and DoB so I can see why.

Thanks,
Tim
Been with ovo since april was happy with with the £64 er month direct debit but ovo have increased this mow in july to 89 a increase of £25 per month meaning I will have paid £990 in this 12 months when with the previouse supplier was £557 for 12 months they have increased the direct debit while we were away on holiday I was under the impression they suggest a figure not just send a email and do it I have complained but not had a answer as yet have no idea where they come to the figure of £950 they expect me to use anyone else had this experience.
Userlevel 7
Badge +2
Been with ovo since april was happy with with the £64 er month direct debit but ovo have increased this mow in july to 89 a increase of £25 per month meaning I will have paid £990 in this 12 months when with the previouse supplier was £557 for 12 months they have increased the direct debit while we were away on holiday I was under the impression they suggest a figure not just send a email and do it I have complained but not had a answer as yet have no idea where they come to the figure of £950 they expect me to use anyone else had this experience.

Hi @chippy419

That’s a big increase, so I can understand if you were a bit miffed when this change was made.

An increase will only be suggested if it looks like you're going to end the contract in debt. We work that out by looking at your account balance, usage and the property's annual usage average. When a change is suggested, we’ll give you around 30 days before the payment date is due. It sounds like this happened whilst you were on holiday.

Shall we wait and see if anyone else has had a similarly unexpected change :?

Tim
Userlevel 1
I've been given a 'recommended Direct Debit amount' below which I cannot go. Your estimate for my annual usage subtracted from the amount you'll collect from me over the year with this new amount will leave over £500 in credit. Why can't I lower the 'recommended' amount so that my annual amount will be closer to your estimate? Why is it called 'recommended' if you can't go below it? Surely 'minimum' amount would be more accurate. My current balance is £0.00.
Userlevel 7
Badge +2
I've been given a 'recommended Direct Debit amount' below which I cannot go. Your estimate for my annual usage subtracted from the amount you'll collect from me over the year with this new amount will leave over £500 in credit. Why can't I lower the 'recommended' amount so that my annual amount will be closer to your estimate? Why is it called 'recommended' if you can't go below it? Surely 'minimum' amount would be more accurate. My current balance is £0.00.

Hi @MartynA - thanks for posting this!

Can you let me know a bit more about this recommended Direct Debit figure - has there been a recent Direct Debit review on your account? Also share where you've got that annual usage figure from and I'll be able to advise further.

Thanks,
Tim
Userlevel 1
Hi Tim,
Thanks for responding. I have recently had a DD review. The reason for this was that, by June 2016, I had built up a substantial surplus in my account so OVO, quite understandably, reduced my DD to £10 per month. I was sent a link at the beginning of July 2017 informing me that I should review my DD amount which I did. The 'recommended' figure at the time was £201 probably due to me having a negative balance of £153 which I settled. So now with a current balance of £0.00 I've been given a new recommended amount of circa £180 which will lead to me having substantial credit balance again. If my estimated annual bill is £1665 surely I should be able to set a DD amount that comes close to that figure?
Hi Tim,
Thanks for responding. I have recently had a DD review. The reason for this was that, by June 2016, I had built up a substantial surplus in my account so OVO, quite understandably, reduced my DD to £10 per month. I was sent a link at the beginning of July 2017 informing me that I should review my DD amount which I did. The 'recommended' figure at the time was £201 probably due to me having a negative balance of £153 which I settled. So now with a current balance of £0.00 I've been given a new recommended amount of circa £180 which will lead to me having substantial credit balance again. If my estimated annual bill is £1665 surely I should be able to set a DD amount that comes close to that figure?


Hmm - let me look into this for you @MartynA

If you send me a PM with your full name, DoB and account number, I'll work out what your Direct Debit should be based on your actual usage.

Thanks,
Emma
Hi, I have received an email today to say that my DD is going to increase by almost 50% each month and I don't understand why. I have been with OVO for 18 months and am currently in credit. I know the price has gone up for fuel but by no where near that amount. I recently had a smart meter fitted - could that be the reason? There is no reason to suggest my energy usage will be any higher this year than it was last and I think this rise is inappropriately high.
sorry 16 months
Hi, I have received an email today to say that my DD is going to increase by almost 50% each month and I don't understand why. I have been with OVO for 18 months and am currently in credit. I know the price has gone up for fuel but by no where near that amount. I recently had a smart meter fitted - could that be the reason? There is no reason to suggest my energy usage will be any higher this year than it was last and I think this rise is inappropriately high.

That does seem like a large increase @lovebaseball - considering that your account is in credit.

Having smart meters fitted won't have a direct effect on your costs, but it will make your billing more accurate. So, if you weren't giving us regular meter readings before and we were estimating your usage to be lower, the smart meter readings will update your account. As a result, if it looks like your usage won't be covered by your current Direct Debit amount - we'll increase it.

We do also encourage our customers to be in credit by at least one month's Direct Debit, so if your current positive balance is a bit low, this may have prompted the team to review your Direct Debit amount.

However, even bearing that all in mind, this increase does seem too high, so I'd like to look into things a little further. Could you send me a PM with your full name, account number and DoB?

Thanks,
Emily
Userlevel 1
[quote=Tim_OVO]
Direct Debit reviews are super complex – and a hot topic here at OVO!
quote]

No they're not! It's pretty straightforward. You pluck an arbritary figure out of the air when we join, based on house size, occupants, etc. Then you spread that arbitrary figure over the year and set a direct debit payment to suit.
It's only a hot topic because you're getting it wrong. People want control and stability. So when you tell people that you're going to change their direct debit and there's nothing you can do about it, people are now no longer in control and it's now unstable. It isn't 'super complex' at all.
I wonder how many customers have received a letter stating that their direct debit is being reduced due to a surplus being forecast?

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