Hi @MBT ,

Welcome to the forum! :)

I think I know what this is. It’s worth mentioning that with a Fixed Rate Tariff, only the tariff rates are fixed, not your monthly payments. If you’re using more or less energy than predicted when the quote was generated, your payments may need to be adjusted to help keep on top of the bills. OVO tries to play fair though, and any payment increases are intended only to help make sure you finish the current contract with a balance just above zero. This will only happen if OVO’s billing platform predicts you’ll be in debit at that point, so it attempts to prevent that.

This isn’t unique to OVO. All suppliers have a similar arrangement in place for fixed rate tariffs. Ultimately however, if you don’t end up using all the credit, it simply stays on the account until you do use it up or request a refund. I normally recommend letting it build up though, unless you’re building up way too much spare credit.

I also have had an email, saying my DD will be increased.

Which I found odd, as I have 21 months to go on our fixed rate deal.

I do not understand the reply from Blastoise,: If I keep consumption about the same as previous years, with my current payment (which is already £10/m over what Ovo say is the minimum), I will have over £200 credit by the end of the plan. With the proposed increase, it will be over £450, which is excessive!

I accept that if my consumption increases, my payments also should.

I also accept that at the end of the plan, it seems likely that the next plan will be considerably more expensive, but I want to deal with that at the time, not now.

So, why are Ovo increasing my DD?

I have had a similar experience and conversation with customer service.

My fixed rate deal expires in March 2022.  I know that the price will go up significantly at that point whoever is my supplier.

Currently Ovo estimate, via their DD tool, that I only need to pay £175pm to cover my expenditure until March 2022.  (They are wrong as it has been a unusually warm autumn and I haven’t switch the underfloor heating on yet.)  Even so they have upped the DD to £225 i.e. £50pm more than they think I need to pay!

Effectively they are demanding that I bank with them.  That’s arrogant!  As my credit balance is already £400+, the rate of return on the money is 3% and more than I would get elsewhere but that is not the point.

I would have adjusted the DD down myself but previously (a few months ago) it had been impossible to set it at a level lower than OVO recommended so I expected not to be able to do that but now you can, apparently.

This does strike me as an attempt by Ovo to improve their cash flow. Of course that is pure speculation on my part. (I was unaware of it, but Tim_OVO recently reminded us that the interest on credit balances is no longer available for new customers.)

Perhaps they need to update the terms on the website then

https://www.ovoenergy.com/terms/interest-rewards

Keep an eye on the DD though.  When I called Customer Service yesterday morning they and complained they altered the DD to £200 and sent me a confirmation email.  That didn’t stop me from receiving anther email at 5pm that day saying the DD was £225!

Surprise, surprise this morning the DD was showing as £225 again. 

Having changed it back to £200 this morning and got a confirmation email I wait with baited breath to see if it is put back up for a third time!

Not so long ago, Ovo's way of estimating direct debits could easily get confused in the other direction. I found that after a few months of making an ad hoc payment a few days before each monthly statement was drawn up, it would let me reduce the direct debit amount to peanuts. I kept in control, rather than it, and I was able to set my direct debit at a constant level that should take me through winter with a positive balance that would fall to about zero at just the right moment in spring, when monthly consumption is (only) just covered by that fixed monthly amount that corresponds to my annual consumption. That's when I planned to set the direct debit to that level.

(I have enough data that I know how my consumption varies across the seasons, near enough.)

Then, earlier this autumn, I realised that it was no longer obvious that I'd renew my contract with Ovo when the time came. So I gave myself the widest range of options, and cut the direct debit to the minimum, £5 per month.

My credit balance is plummeting fast, but will still be positive when renewal time comes. (But it won't be anywhere near big enough to take me through winter the way it would otherwise have been.)

If Ovo read this long and rambling post, it might just help them realise their direct debit estimating algorithm is truly broken.

It angers the customers who suffer unreasonably high minimum DD levels.

But it also lets someone (me) who stumbles across its weaknesses, exploit them to the full.

But understand, please - I've had a healthy credit balance all the way through. It's just that I remained in control of my direct debit amount, rather than Ovo, and I made extra ad hoc payments that led Ovo's algorithm into offering me a £5 per month minimum DD. I accepted the offer.

I am aware that I am fortunate to be able to stay slightly ahead with my bill payments in this way. But because Ovo (used to) pay interest on a credit balance, this was a rational choice to make.

Hi everyone, 

I wanted to send a quick reminder of how Direct Debits work, to go along with our guide here:

The aim of that minimum Direct Debit is to keep you out of the red by your contract end date. It looks at how much energy we predict you’ll use, and your credit balance, and your contract end date. 

This would make sense, @Simon1D. If you’re making payments, building up credit, and moving towards your contract end date, I’d expect to see that minimum Direct Debit amount figure drop way down. Of course there may be something else at play with your account that we don’t know about. 

In general though making payments is a great way to ensure you’re account balance is healthy and you keep your Direct Debit options open. 

Hi Tim - when Ovo's algorithm made the offer it did, it seemed to me that it was making a calculation which was taking for granted that my ad hoc payments would continue at the same rate.

Roughly speaking, I suspected the algorithm was offsetting my extra payments against consumption, rather than treating them as the payments they were. In that case, the tiny direct debit amount is mistakenly thought to cover all of my consumption rather than only the part which had, up till then, not been covered by those ad hoc payments.

I think there is a thread on here somewhere, in which I once tried to explain how to forecast balance over the rest of the contract, and making a clear distinction between the effect of payments and the effect of consumption turns out to be key. (I included some examples of what I used to do in Excel, and @Transparent and I had slightly different ways of doing things).

But in summary, I stick to my assertion that the DD estimator is broken, and for some customers the errors are in the opposite direction to the way it benefited me, and painfully obvious (to the customers if not to Ovo's algorithm).

My account has gone from a showing a 60% reduction in the minimum payment, to

“We can’t show you a payment recommendation right now”  

(actually £00.00 dd would put me at zero balance come the end of contract mid March 2022)

But I would like to query @Jess_OVO comment of

                                                                                     ……….
 

we’re suggesting an additional increase to your monthly payments as we anticipate the energy prices will be a lot higher when you come to renew (the prices of fixed-rate plans have more than doubled in the past year). By building up a credit balance now, you’ll be able to use this extra credit when you renew and avoid a big jump in your monthly Direct Debit amount at this point.

                                                                                   ………..

Suggesting,  an additional increase by notifying the customer is fine with me,

but pro actively increasing dd payments for anything out of contract just doesn’t sit right.

Tom…

Not to mention, anticipating (assuming?) that the customer will be renewing their contract with Ovo, when the time comes.

Same as most here. currently £460 in credit and want me to double my DD ! no way. I still have 17 months to run on my 2 year fixed deal. I maybe getting old but I know how to manage my accounts.

To ask the blunt question:

Would Ovo claim that the customer would be breaking the terms and conditions of the contract if they refused to increase the direct debit amount by/to whatever monthly amount that, in Ovo's opinion, is required in order to arrive at the end of the contract term without a large balance either way.

Declined to take up the invitation to increase the DD amount is the more neutral way I would put it.

And if that's Ovo's assertion, I think it needs to be tested because, in my non-legal opinion, such a contract would be unfair.

Me too….I got an email yesterday and was a bit gob-smacked. Got a new boiler to replace a 40yr old one, reduced my DDs just a smidgen as recommended, on a fixed 1 year deal...until next Sept. And now I have to pay more, even though I am nearly £200 in credit….I would not mind if they had suggested I change, but to do it automatically…..thought about ringing customer services...do we just have to wait until it happens then reduce the payments? then get another hike of the DD and change it back? I would not mind but it takes a while for the changes to the DDs to kick in, so its a real pain to have the monthly payments jumping up and down. Hey OVO, make this DD change voluntary please!

Of course, I posed my question wrongly. Sorry.

It is in the T&Cs that the DD should be set in this way. What was not in the T&Cs, the last time I looked, was setting the DD at a level that has the aim of building up some credit to carry forward to the follow on contact.

The reason I think that might be judged to be an unfair term is that it appears to take for granted that there will be a follow on contract with Ovo.

I would like a response from Ovo on this, please, @Tim_OVO

You’re quite right there, @Simon1D - Our minimum Direct Debit amounts are set to ensure you finish your plan without a lump sum to pay. As mentioned above, these latest Direct Debit increases aim to build up slightly more credit to avoid a sudden increase in your payments when you come to renew. If you’re not yet sure whether you plan to renew with us you can of course reduce your payments yourself by heading over to the ‘Payments’ page of your online account, as long as you’re still paying the minimum amount.

I hope this helps explain your Direct Debit options and the reasoning behind these latest increases.

What’s at issue is Ovo’s idea of a reasonable minimum amount.

So today, for example, now that Ovo thinks it’s supplying me with gas on its variable tariff, it has set that minimum at £90, despite my being £130.38 in credit. Or rather, that’s what it said earlier this morning. I just looked again, to check, and now it says “Sorry, we’re not able to show you a payment recommendation right now. We’re working super hard to fix this.”

For what it’s worth, that £90 figure would not be unreasonable, as a way to spread costs over a whole year: the same gas energy as I consumed over the last 12 months, if I were paying for it at today’s variable tariff, would cost me about £94 * 12 (after using up that credit balance, and allowing for the standing charge). So I’ve no complaint about that at all.

But that’s not how you describe things:

“these latest Direct Debit increases aim to build up slightly more credit to avoid a sudden increase in your payments when you come to renew”

To be clear, I haven’t been on the receiving end of one of these increases and it was in response to reports from others who have, that I observed that a side effect of those same Direct Debit increases would be an immediate improvement in Ovo Energy’s cashflow.

These are two very different possible explanations for why Ovo is increasing its minimum DD amounts for customers who still have some time before their fixed rate plan ends. Who knows which might count for more in Ovo’s eyes? Not me.

Similar situation.
Fixed for 2 years in September 2021. Received email stating that they were going to increase direct debit from £200 to £220pm. Calculator predicts that account will be in credit by £400+ at the end of the contract at £200pm and £800+ With increased direct debit of £220pm. Interesting that the online calculator is unable to suggest a monthly DD amount at this time

Can only assume OVO is trying to improve their cash balance at the expense of their customers. Wonder if they are worried about their future in the medium term?

Just had the email telling me that my dd is set to increase, 

The email states We're increasing your Direct Debit, to help cover future price increases

My faith in ovo has fallen tenfold due to the way ovo have suggested / advised / enforced this increase in 1 swift exercise.

My fixed term ends in March so the 10% increase that ovo have applied to my dd payments (without my consent) will do little against the eye watering expected £500 a month mark if I take out a fixed 2yr deal with ovo come March? the 1yr fix is even more expensive.

(based on an online quote today as a new customer)

As I have previously mentioned, I have no issues with ovo informing the customer of the energy market crisis? & their proposed benefits of increasing dd payments now! 

To be honest the response of 

If you’re not yet sure whether you plan to renew with us you can of course reduce your payments yourself by heading over to the ‘Payments’ page of your online account, as long as you’re still paying the minimum amount.

So as I see it,

Ovo are quite happy in deciding what is best for the customer & duly increase the dd payments (with the added pretence of benefiting there customer base & enforce it without question ( the thought that it raises revenue for ovo never crossed my mind)

but are then happy enough to let the customer decide if they then wish to lower there dd payments to there previous ££ or even at a reduced ££ 

Why the double standard?

(One option dose raise dwindling capital for ovo) my bad, did I say that last bit out loud, oops

My 2nd account (also in credit) has been showing the last couple of weeks  “We can’t show you a payment recommendation right now”

I wait in anticipation for another email

Tom…

I’ve also had the email, a 10% rise: £200 to £220. Personally I think it’s a good idea. Why not build up a bit of credit so we’re braced for the enormous increase that’s coming? There is the option to set it back, but this way the pain is eased a little. 

Hi @TomThumb and thanks for this honest feedback. 

I would say that even though your account is in credit right now, energy prices could go up again next year – and fixed-rate plans currently cost more than 2020. The prices for fixed-rate plans have more than doubled compared to this time last year. 

That said, the last thing we want is for you to worry about paying for your energy. If the amount we’ve suggested doesn't feel manageable, or if feel it’s unnecessary, that’s okay. You can change back to the minimum payment in your online account. If the minimum payment still feels like too much, please let us know. You can call us on 0800 0699 831 and we can work out a payment plan together.
 

Hope this helps

I’d agree with julia as well, this does seem to be a good idea, even if the execution wasn’t perfect. But that can always be fixed for the future.

I’ve not seen the email myself and I might not get one, since I already set my payments to be well above what I need to be paying to stay on track. If I do get it myself, I’ll have a read through and give my thoughts based on my actual experience.

Probably also worth noting that OVO isn’t allowed to do anything with the spare credit other than stash it into a holding account at the bank until you’ve actually used it. The only time it gets released for OVO to do anything else, is after a bill is generated which collects some of the credit you have. Until then, it just sits in a bank account waiting for something to happen.

@Tim_OVO  Ovo informing their customer base of the ongoing energy crisis & suggesting an increase to there dd payments to ease the inevitable increase in the coming months is all well & good, it even makes sense

The  issue I have is ovo’s oversight that this approach will be welcomed by all of it’s customers & is forced upon us given that no consent has been made.

A simple check box confirming that the customer is happy to proceed with ovo’s (big brother approach) recommendations would have been a far better way of handling things.

Unfortunately I personally don’t agree with how ovo have handled this entire process,  

Edit: due to my slow typing, @Blastoise186  has hit the nail on the head with 

“this does seem to be a good idea, even if the execution wasn’t perfect. But that can always be fixed for the future.”

Tom…

I just wanted to follow up as I promised I would.

I’ve just received an email from OVO today which seems like it’s the one being discussed here. However, there’s no mention of any payment changes in my case, and MyOVO is showing no changes to my actual payments. In actual fact, my recommended payments have dropped quite a lot below what I’m paying in, but I’ve chosen to keep things as they are.

There’s a checklist about keeping my account up to date, which mentions the following:

• Verifying my contact details are correct (yup, all good!)
• Send a meter reading - Raichu does that for me anyway
• Keeping an eye on my usage with the app - which I’m always using… And bug hunting!
• Signing up for the Priority Services Register - already did that last year and I’ve recently re-verified the registration details

There was no mention of anything payment related in this particular email. My most recent bill also confirmed that everything looks good as-is.

I’m afraid I can’t share the full contents of the email for privacy reasons, so you’d have to trust my word on this, but that’s the email I’ve received in as much detail as I can post here.