Increase to Direct Debit - new way of calculating Direct Debit amount?

You can usually alter the direct debit amount in your bank account.  Have a look at what your annual cost is.  It could, perhaps, be a computer (mis)calculation.

Thanks for the replies. I might inquire about paying my actual monthly bill without using D/D. On a yearly basis I know the payments I make cover my bills. I just disagree with now having to leave an extra months payment in my OVO account when I know it’s not needed. And OVO wanting to up my payments as a penalty for wanting my own credit back. As well as knowing the extra amount they want to add monthly will add up to another credit I again have to argue for back. 

I used to pay my OVO bill quarterly in arrears (with 28 days to pay); I know this wasn't the cheapest tariff, but I paid by credit card, so I got up to 6 weeks before I actually had to pay the money, and also got points on my credit card.  That suited me fine, because I was in complete control of the amount paid.  I don’t really trust anybody (other than the local council, and the bank itself) with variable direct debits!!!   

BT, British Gas, and even Thames Water are (still) quite happy with this quarterly arrangement.   But, OVO changed it to monthly billing (and only 14 days to pay), without adequate warning.  I hit the roof!!!  And, I took it as far as the ombudsman.   I actually got an apology and some financial compensation from OVO, because they didn’t communicate the changes to me as well as they should have, or deal with my official complaint, as well as you could have!!!  

What I learnt is that suppliers are allowed to change their conditions of business, without the customer’s explicit agreement, as long as the changes are “reasonable”, and communicated in a timely manner!!!   Interestingly, the only contract I ever signed for my electricity supply was with Southern Electricity (even before SSE)!!!

I hope that’s a fair summary of what happened, if not I’m quite happy to apologise to OVO.

How changes to OVO’s core terms and conditions are made is clearly laid out, and it’s even more draconian than you say; see here: Read Terms and Conditions. Only if the change puts you at a disadvantage are they obliged to notify you beforehand, giving you time to avoid the change should you want to.  

Interesting - I wonder if the ombudsman would think this contract is reasonable - anybody like to take it to them???

I now think the reason that OVO didn’t inform me properly in advance of the change to monthly billing may well be that they (genuinely) thought it was not to my disadvantage, which I quickly told them was incorrect.  I told them that I’d much rather have the cost of up to 2 months electricity sitting in my Cash ISA, and that I did not appreciate having to receive a bill, check it, and then pay it, 12 times a year, rather than just 4.  I think the ombudsman agreed with me, but they couldn’t say that the new arrangement was actually unfair, just worse for me than the previous one.

Morning ​@moragj and welcome to the OVO Forum.

Have you only recently switched to OVO this year? If so, we won’t have any previous winter usage data to base the calculations on, and will estimate this based upon summer usage since you joined. 

The Direct Debit review procedure aims to see you through the winter without ending up in debt, and the calculations are based on estimated annual usage, your rates and your current balance. By now, we’d expect you to have a few months’ worth of credit on the account to see you through the winter, when your usage will be substantially higher. If there’s not a lot of credit on the account, or the account is in debt, then the Direct Debit will be increased to avoid falling into debt during the winter, and can be lowered again as we head into the spring.

It’s important to note here that the calculations could be wrong if the figures we hold for your annual consumption are incorrect. I suggest, if you haven’t been with us for a year yet, that you get a previous reading from your old supplier for a year ago today or as near to that as possible. Send this previous reading to our Support Team and request that they calculate your EAC (annual electricity consumption) and AQ (annual gas consumption, if you have gas). They’ll be able to use this usage to ascertain what your average monthly spend is on your current rates, and use this to calculate the Direct Debit.

If the figures we hold in our systems for your annual usage are incorrect compared to what they’ve manually calculated, then they should be able to lower the Direct Debit to something more sensible. Please note that we don’t have access to customer accounts on the Forum, so I can only speculate as to what’s happened here. If the account does not have much credit, or is in debt, then the Direct Debit will certainly need to be increased to avoid falling into further arrears in winter.

I hope this helps.

I have been with OVO since they took over from SSE approximately 20 months ago.

They have more than 12 months consumption usage.

Last winter we had storage heaters, this winter we don’t as they were removed.

 I am not willing to pay an extra £200 a month for a heating system we don’t have.

OVO has very poor listening ability and kept referring to last winters consumption despite being told repeatedly that we no longer have that system and my average consumption is now consistent over the year

​@moragj if you’ve been with us nearly two years then we should have more than enough usage data to base the direct debit calculations from. Our computer systems will be assuming that you’re going to use the same amount of energy this winter as you did last winter. The algorithms we use won’t take note of the fact your storage heaters have been removed.

If you had the storage heaters removed, this may reduce your usage, but that’ll remain to be seen over the winter. Have another chat with the Support Team and hopefully you’ll have more luck. To confirm though - if the account is in debt they’re probably not going to be forthcoming about reducing the Direct Debit. You say your consumption is now consistent, but we won’t know that until well into the winter.

If you can’t afford the increase it may be worth speaking to our Collections team, who’ll be able to set up a payment plan for you. You can find out more about this here.

Without seeing your account I can’t confirm that your average usage is £250 per month but, bare in mind, if this is the case and the account is in arrears, then paying £280 per month over the winter won’t see the account go back into credit. 

I hope this helps, and let us know if you get back in touch with Support about this.

Hi and thank you for your patience in trying to resolve this.

 I am in credit so there’s no question that I have a debt to clear.

My usage is consistent, EV, work from home, gaming systems and appliances. 
We have also removed the electric hob and have calor gas now so I am absolutely confident that my usage is correct and will not change over the winter.

I believe that if OVO doesn’t start listening better then despite the best efforts of people like yourself they will continue to lose customers.

 I have switched to Octopus from tomorrow.

​@moragj good morning,

I’m sorry that there was no flexibility offered when you spoke to customer services about this. That’s a real shame from a customer experience perspective, and more so now that its caused you to switch away.

I hope everything goes trouble-free for you with Octopus.

All the best,

Ben

This is misleading; 0.7% is the effect on one month's direct debit which you the

 have to do 12 times a year

As a  example , if estimated annual cost was £1200 then DD would be £100 based on the normal method of calculation.  With OVO they would divide (1200 +100)/12 = £108.33 I.e a  8% increase a month

The monthly increase in your example - £8.33 - is not quite 0.7% of the projected annual cost, as I wrote. My own estimated annual cost is about £450, so the increase in the monthly payment is ~£3, which I won’t make a fuss about. I’m sorry if you were misled. 

Just spotted the direct debit hike in the OVO.app.

Wow!

Goodbye OVO, hello Octopus.

Can OVO change our DD amount without informing us beforehand and without our permission? Despite being in credit for over £200, our DD has been changed from £160 a month to £245. Told them we cannot afford this change and they will send us overdrawn if they take this amount out in November??

Sadly, yes. They are though bound to tell you in good time so you can take steps to avoid the situation you describe. ‘In good time’ means you could cancel the upcoming payment, but that wouldn’t be the best way forward.  

That doesn’t mean much, because the balance on your account changes daily, usually from a high point just after the DD is taken to a low one just before the next is taken. Here’s mine from August, where it increased 10-fold overnight: 
  

That should have prompted Support to offer to help. They may be able to pause the increase for some time while a lasting solution is worked out; you could probably reduce the amount by 10% online, or even 15% if you ask nicely. If these remedies aren’t enough, there’s advice on what to do next here: Struggling with your energy bills? We’re here to help | The OVO Forum. You’ll see that that article includes a link to a quick and easy tool to help you: Payment support | OVO. There’s another article with perhaps a bit more detail here: Struggling to Pay Your Energy Bills? We Can Help

Please let us know how you get on.

I received an email telling me my monthly direct debit is going up by £20 a month. This month I was under our currently agreed limit by £5. £30 is one hell of a hike, which I’m not happy to agree to. Advice welcome. 

Are you on (or just come out) of a personalised repayment plan?

If you go to your onlime account and click on ‘Adjust Your Direct Debit’ then click the green ‘Continue’,then scroll down -  are you offered an option to reduce your payments by 10 %?

If that offer isn’t there, or if you want a bigger reduction than 10% then you will need to contact support and ask.

For contact methods see thisL

​@Paulyc let us know how you get on following ​@Nukecad’s advice.

The Direct Debit review procedure is in place to ensure that your account doesn’t fall into debt during the winter months when your usage is higher than average. The guide below gives advice on how to check the Direct Debit calculator online and in the app:

I am getting fed up with my direct debit payment being ‘adjusted’ almost every month. Its never consistant. I understand the need to remain in credit-but how can I budget when every month it is a different amount even when I have credit of over £200. Whats a ‘month’s credit’ when its always changing in the first place! I have never known any other industry-or energy company-which changes peoples direct debits so frequently! Its making it very difficult to budget month by month when my direct debit to OVO is adjusted every 1-2months. I dont understand why its so frequently changed -its not giving time to adjust/monitor my usage. Im always in credit yet for example it increased by £80 this month-then on the app its saying next month its reduced by £40! 

This shouldn’t happen, although I suppose it might if the account goes into debt at some stage, which is against the core terms.

You say you have a credit balance of £200. With OVO’s live billing model, the balance changes daily*, so a credit balance can soon shrink. Have you looked at the Direct Debit Calculator? This will help explain why your DD has to change if it does.  Post back if you’re none the wiser.
  
  

*    I plotted my balance for each day in August:
  

The upwards lurch shows when the DD was taken. Afterwards, the balance (£38.22) was suddenly more than tenfold what it had been the night before (£3.69). I hope this illustrates why “I have a credit of over £200” doesn’t really mean very much. 

Ive used the calculator to see how they calculate and every month its different due to less months remaining to March 2026. Our usage ranges from £110-£120 in summer months, to £190-£200 in winter. I used the annual usage for the last couple of years to get estimates when renewinf and usage fairly consistant. We paid £260 a month for 3 months, then last week it was £320, its now saying next month our DD will be £310. Each month or 2 is a different DD. Its frustrating. I dont understand if they use the estimated annual usage and divide by 12 or however it is-why they then do it EVERY month and get a totally different value-which then adjusts our DD. I would rather pay excess amount and build credit overwinter. This everchanging monthly direct debit is fristrating. 

Please don’t concentrate on the amounts you’re being charges or required to pay by DD. Start with the Future Annual Consumption (FAC) projection shown on your Plan details page (on the web, not in the app). How does this number compare with what you see on the Year tabs on the Usage pages for the past couple of years? You could even use the average figure for this year x 12 to get an idea of the latest annual figure. The FAC is what the DD is based on, so if it’s way out, the DD will be, too. 

Thank you, i’ll look at that.

I think what bugs me is the frequency at which they adjust our direct debit. It makes it difficult to budget when its changed every few months by large amounts without any real rationale why. No other service changes with this frequency. its frustrating. I juat wondered of other users had this constantly changing direct debit and if it was juat “a thing” OVO did.

Just to mention…

OVO doesn’t actually modify the DD on a monthly basis - it’s reviewed every three months and only gets modified as a result of those reviews. The suggestions on the calculator change daily, but nothing happens unless you actually commit to those suggested changes yourself.

Thanks Blastoise186…..so the Direct debit is changed and theres nothing I can do about it. I was paying £260 last month, now its £320. I will see what they take next month. Im getting that this is just how energy with OVO is paid and have to just get used to it varying throughout a year.