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

Welcome to the OVO Forum ​@loafer.

​@neophlegm ​@loafer ​@Whipster2210 I’m sorry to hear of the dissatisfaction caused by the changes to the calculations, and I can understand why you’re frustrated.

​@neophlegm please bear in mind that the Forum is a place for members to have open discussions that are in line with community guidelines and house rules. Members are, of course, free to discuss any grievances they may have with OVO procedures and policies, however our small team of Moderators can only advise as to what these procedures are. If we post anything quoting or describing OVO policies, we are doing this to give other Forum members visibility of said policies. This is in no way meant to be patronising towards anybody, and it doesn’t mean that members cannot carry on their own discussions.

If you would like to discuss a refund amount of more than is being suggested on your online account or app, you’ll need to speak to our Support Team. As Forum Administrators, we have no visibility of customer accounts, so our Support Team will need to have these sort of conversations with you. At the end of the day, OVO can’t hold onto your money and our Support Team can refund an amount over that suggested on your online account. Please bear in mind however, that a large refund may result in an increase to the Direct Debit depending on the account balance.

Or is it like Tesco delivery asking you to pay for your groceries before they deliver to your home and you consume them?

There is more than one way of looking at most things, and many things that you want to use/consume have to be paid for in advance.

PS. Personally I don't like they way they are doing it, but can see their point.

Maybe it's because I've lived through an age when energy companies seemed to manage well enough by taking meter readings once a quarter and sending a bill through the post to be settled within a week or so that I find this unnecessary plus the suddenness of the announcement and the harsh wording implying there was no consumer choice. Could have been handled better.

Why is OVO Energy trying to double my DD when we have proved mathematically that you have already over estimated previous readings. Are the complaints staff on a bonus to give ridiculous answers and ignore facts. Given that OVO Energy has already been fined £2.4m by the regulator will we get compensation for being over charged?

They have, yet again, changed the way that they calculate the Direct Debits required.

There have alredy been complaints about it.

Personally:
I can see why they have done it, although I can’t say what Ofgem will make of it.
However I definitely don’t agree with the heavy handed way that they are doing it.

The way to avoid estimated readings is to submit them manually at least on the first day of every billing period - or get a smart meter. 

Money you pay by Direct Debit {DD) is credited to your OVO account. It remains yours, but it’s used to defray the charges laid out in your bill. Paying too much just increases the balance on the account - it’s not an overcharge.

When you agree to pay by DD (and benefit from the lower rates this entails), you also agree to keep your account always in credit. As ​@Nukecad pointed out, OVO have recently gone even further, expecting you to have a month’s costs in credit at the end of winter. This will involve a small increase (0.7% of the projected annual cost) in the DD amount. 

One frequent cause of unreasonably high DD demands is in incorrect Future Annual Consumption figures on your account. You can see these on your Plan page. These are adjusted when meter readings are received - another good reason to submit regular readings, or get a smart meter. 

The increase in the annual payment arising from the new policy is one average month’s cost, 1/12 of the total cost for the year. The annual payment is spread over 12 months, so each month’s payment has to increase by 1/12 of 1/12 of the estimated annual cost. 1/12 x 1/12 = 1/144, or about 0.7%.

If you are being asked to pay twice the amount you were paying previously, there is something else involved. I mentioned two factors:

• The requirement to keep the account in credit always (not as it used to be, when accounts sometimes had negative balances in midwinter but positive ones in summer).
• The size of the Future Annual Consumption figure(s) used to calculate the DD amount. Have you checked that they’re reasonable? 

There are other factors, like an increase in the tariff rates. This will only have happened if you have recently come to the end of a fixed-term contract with prices below the ones for your current tariff. 

You can see OVO’s calculation - and do your own - using the online Direct Debit calculator. 

Hey ​@D Manser,

Welcome to the OVO online community, 
 

We have made the change to build one month's usage credit by the end of the winter period on our customers accounts. This credit will help to cover any changes to your energy usage or costs throughout the year leading to a smoother payment journey. Your Direct Debit is managed to ensure that you do not build too much credit on your account and also ensures your account does not fall into arrears should anything change with your usage. If you do build more credit on your account than is needed, we will recommend you reduce your payments or alternatively, you can request a refund at any time Our recommended Direct Debit amount is a suggested amount to ensure you pay for your predicted energy and don't end up with any debt or too much credit by the end of the Winter period. Your energy costs may go up or down throughout the year and we want to support you with those changes. Paying by Direct Debit helps to spread those costs so you don't end up with large bills to pay, and paying by Direct Debit is one of the cheapest ways to pay. 

How we work out your Direct Debit amount

The aim is to make sure you have credit for 1 month’s payment in your OVO account by the end of March. This is to help cover any change in your home energy use over the course of the year. 

For new customers, this only comes into effect once you’ve reached March. When you first join, the aim is to make sure you have no balance left to pay after 1 year.

Your Direct Debit payment amount will be regularly reviewed to make sure it still covers your home’s energy use.

Why is my Direct Debit increasing when my balance is in credit?

It’s normal for a credit balance to build up in your energy account over summer, when energy use is usually lower. This credit can help pay for your energy in winter, when most homes use more. It helps you spread your energy costs over time. Even if your energy account is in credit, sometimes your Direct Debit payments still need to increase.

This could be the case if we’ve worked out that your OVO account is likely to have a debt balance long term – based on how much energy your home is predicted to use. 

You can always choose to get a credit refund if you prefer. Request one at any time in your online account, in our app, or over the phone. You just need to leave credit in there for 1 month’s payment. This is in line with our refund policy.

These topics might have some helpful advice here:
 

It does seem like the direct debit calculation can’t even be overridden at staff discretion. They’ve just tried increasing my mothers direct debit from £50 to £88 when she’s £250 in credit and her last three monthly bills were £16, £18 and £25. I’ve notified them her flat is empty as she’s in a care home, but apparently the most they can do is override their algorithm for 90 days and then their system will try increasing it again and I’ll have to contact them again 🙁

Hey ​@B Robertson, 

I’m sorry for the frustrating situation you’re in. 

The direct debit calculation is based on historic usage in a property, so the more meter readings you submit showing little to know usage, the calculation will adapt accordingly. You could also get a smart meter installed at the property so the readings are sent automatically & you don’t have to submit these yourself manually. It’s worth noting, even if a property is empty, you’ll still need to pay a standing charge. 

I hope this helps.