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The end of the interest payment to help the customers pay the right amount through direct debit

  • 22 January 2024
  • 59 replies
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J
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 During the early periods of high energy prices I was continually bombarded with emails to increase my DD as I “would not have enough money in my account to cover a 12 month plan’ and needed to ensure my account had a positive balance to cover any high bills” .  Considering that I wasn’t on any fixed plan, I really couldn’t understand OVO’s thinking.  Thankfully that particular period is over and everything has been good to this point.

I have, for many years received an interest payment monthly on my bill for keeping a positive balance on my account.  This wasn’t a great amount - but it was now nice to have. Today, I have received an email informing me of the following: 

 
“You’ll no longer get Interest Rewards from February 2024
 This won’t affect your energy plan and our terms are staying the same. 

 Direct Debit payments need to be as accurate as possible
 
The aim is to make sure customers are paying the right amount for their energy. We don’t want you to have more in your energy account than you need to.”

You can’t win - can you?

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Best answer by Emmanuelle_OVO 24 January 2024, 10:38

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L
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So just had an email saying no more interest on credit balances after this month.☹️

This is a real shame this was one of the reasons I joined OVO in the first place.

G
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Agree completely. This is a joke. And not a funny one. Not only is the interest reward ending, reading between the lines they're going to make me either get a refund or get me to lower my payments so I'm not keeping more in my account than needed. How the heck do I know what's needed when prices keep changing every 3 months?  I deliberately keep a lot of credit in my OVO account so that I know the money is there if we have cold snap like recently so I can put my heating on and not worry about finding the money.

If I only have one month worth if credit like they propose, that might not cover me for 2 months of bad weather then they'll home the payments that I probably can't afford to do.

It's my money, if I want to keep it in my OVO account so I don't spend it that should be my choice not OVO's, or the government's, or Martin Lewis (who has been a big campaigner on this stuff).

Jeffus
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@Lucky2 you 

Agree completely. This is a joke. And not a funny one. Not only is the interest reward ending, reading between the lines they're going to make me either get a refund or get me to lower my payments so I'm not keeping more in my account than needed. How the heck do I know what's needed when prices keep changing every 3 months?  I deliberately keep a lot of credit in my OVO account so that I know the money is there if we have cold snap like recently so I can put my heating on and not worry about finding the money.

If I only have one month worth if credit like they propose, that might not cover me for 2 months of bad weather then they'll home the payments that I probably can't afford to do.

It's my money, if I want to keep it in my OVO account so I don't spend it that should be my choice not OVO's, or the government's, or Martin Lewis (who has been a big campaigner on this stuff).

You can leave as much in your account as you wish and don't have to change the DD.

Is it completely up to you.

 

C
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And wasn't a condition of receiving the interest that you didn't contact OVO customer service? Guess we can contact them now without repercussion. So when more of us are contacting them it will inevitably result in higher prices to maintained the service. All good things come to an end.

Jeffus
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And wasn't a condition of receiving the interest that you didn't contact OVO customer service? Guess we can contact them now without repercussion. So when more of us are contacting them it will inevitably result in higher prices to maintained the service. All good things come to an end.

That was something different called the self service reward which is already gone.

N
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Another one here who liked the £500 interest as it made it simpler to build up some credit in the summer to cover the winter gas prices and at least get some interest on it rather than having to take the money out into an interest paying account.

To compound this change, the automatic direct debit system does not seem to take into account the charge anytime rates as it is trying to set the direct debit to the normal rate price - this will mean I am forced to have a lot of credit in my account, which reading up on the expectations will likely mean by direct debit will change frequently as the system tries to get the amount of credit down.

This change is definitely one for the worse!

L
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@Jeffus That's what I do I have the same DD all through the year so I know I have the money in my Ovo account when it comes to the winter months.

G
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@Lucky2 you 

Agree completely. This is a joke. And not a funny one. Not only is the interest reward ending, reading between the lines they're going to make me either get a refund or get me to lower my payments so I'm not keeping more in my account than needed. How the heck do I know what's needed when prices keep changing every 3 months?  I deliberately keep a lot of credit in my OVO account so that I know the money is there if we have cold snap like recently so I can put my heating on and not worry about finding the money.

If I only have one month worth if credit like they propose, that might not cover me for 2 months of bad weather then they'll home the payments that I probably can't afford to do.

It's my money, if I want to keep it in my OVO account so I don't spend it that should be my choice not OVO's, or the government's, or Martin Lewis (who has been a big campaigner on this stuff).

You can leave as much in your account as you wish and don't have to change the DD.

Is it completely up to you.

 

Not quite how the email reads.

 

The aim is to make sure customers are paying the right amount for their energy. We don’t want you to have more in your energy account than you need to.

Extra credit in your OVO account? Here’s what to do

 

The choice on what you do with any extra credit is completely up to you. You just need to leave one payment’s worth of credit in your energy account.

 

The phrasing of that seems to imply they'll prefer it. (and probably keep pestering) if we only had one or two month's DD amount in our account. I'd rather my money he there so I can't spend it and then not have it when I need it.

V
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Myself and a few friends with Ovo have used Ovo to store our savings for the past few years as the 5% interest was more than most savings accounts.

Given how suddenly this scheme is ending, Ovo are going to have to refund a considerable amount of funds all at once. Probably the vast majority of customer funds they hold…

juliamc
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The title of this thread is misleading. It sounds like it’s the Interest on credit that’s ending. That’s a shame but it has no bearing on whether customers choose to leave plenty of credit in their account. Lots of people have complained that OVO asked for too much credit to build up, that requirement is now apparently being relaxed.

Jeffus
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The title of this thread is misleading. It sounds like it’s the Interest on credit that’s ending. That’s a shame but it has no bearing on whether customers choose to leave plenty of credit in their account. Lots of people have complained that OVO asked for too much credit to build up, that requirement is now apparently being relaxed.

It is ending 

 

N
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The phrasing of that seems to imply they'll prefer it. (and probably keep pestering) if we only had one or two month's DD amount in our account. I'd rather my money he there so I can't spend it and then not have it when I need it.

 

This change is due to an OFGEM requirement to all energy suppliers to have them target customers having little credit - https://www.ofgem.gov.uk/publications/direct-debit-market-compliance-review-progress-update

OVO have a responsibility now to keep changing the Direct Debit to prevent a build up of credit.

O

This change is due to an OFGEM requirement to all energy suppliers to have them target customers having little credit - https://www.ofgem.gov.uk/publications/direct-debit-market-compliance-review-progress-update

OVO have a responsibility now to keep changing the Direct Debit to prevent a build up of credit.

The whole point of paying monthly is to build up credit in the summer months to pay for the higher bills in winter,  If you only keep 1 months credit during the summer, then you are going to get a big rise in the Direct Debit when winter comes, you might as well be paying on receipt of the bill if it was not more expensive to do so.

However, I think OVO are using this as an excuse to remove the interest payments, which they could have continued with on lower balances for those who wanted that.

Changes due to government regulation and ‘do-gooders’ like martin lewis usually end up costing the majority of us more money to the possible benefit of a few.

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Changes due to government regulation and ‘do-gooders’ like martin lewis usually end up costing the majority of us more money to the possible benefit of a few.

 

That is very unfair on Martin Lewis, he was trying to stop the practice of some energy companies forcing customers to build up large levels of credit that much more than were needed to cover the average cost of the year (Which I wholeheartedly agree with him on!) . The problem is the way that goal was then translated into legislation which is now having this opposite effect with forcing energy companies to minimise the amount they hold in credit.  

T
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I too got the email and wanted to change my payments to reduce the credit but it wont allow me to reduce the amount so my credit will not reduce any time soon.

juliamc
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The title of this thread is misleading. It sounds like it’s the Interest on credit that’s ending. That’s a shame but it has no bearing on whether customers choose to leave plenty of credit in their account. Lots of people have complained that OVO asked for too much credit to build up, that requirement is now apparently being relaxed.

It is ending 

 

Sorry Jeffus, I phrased that badly. I meant the title suggests that Credit is ending..!! Whereas all that’s ending is the interest on credit.

Actually I’m surprised it’s gone on for so long as Blastoise said some time ago that Ofgen only allowed it as a special case (or words to that effect - they will put me right I’m sure!!).

Blastoise186
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And wasn't a condition of receiving the interest that you didn't contact OVO customer service? Guess we can contact them now without repercussion. So when more of us are contacting them it will inevitably result in higher prices to maintained the service. All good things come to an end.

That was something different called the self service reward which is already gone.

In addition, the “don’t talk to customer service” thing is no longer being enforced even for people who were still getting the reward after it was shut down. OVO basically said “you’re welcome to keep the reward until contract renewal BUT we won’t penalise you for contacting us anymore”.

However, iirc no-one’s getting it now.

Securing energy by zapping security bugs... For that is The Blastoise Way!
Blastoise186
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This:

Actually I’m surprised it’s gone on for so long as Blastoise said some time ago that Ofgen only allowed it as a special case (or words to that effect - they will put me right I’m sure!!).

 

Is the correct answer. OVO had to get very, very special permission from Ofgem to be able to offer OVO Interest Reward in the first place, for which one of the strictest conditions was that it had to be open to recall at anytime at Ofgem’s discretion. The ability to offer it has never formed part of the Standard License Conditions, so if memory serves OVO got some kind of derogation to allow it. But we’re going back a loooooooooong time and I don’t really fancy digging that far back into the Ofgem Master Publications Library at this hour. But if you’re up for it, please feel free.

It must be stated that Ofgem actually asked OVO to make changes to OVO IR a couple of years ago, which was one of the reasons it stopped being offered to new customers and is not available to anyone who came over from SSE. I predicted at the time that OVO IR would inevitably come to an end for everyone at some point in the future. The only bit I got wrong was exactly when it would happen.

This is not a decision OVO just made overnight - Ofgem probably requested OVO to do it.

Also, any savings made by NOT giving out OVO IR can always be re-invested elsewhere in the business.

Securing energy by zapping security bugs... For that is The Blastoise Way!
Firedog
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I’m sorry to see the IR go. At least this is one fewer headache for those responsible for VAT at OVO. Those of us who have been lucky enough to earn the reward have always achieved more than the advertised percentage, because (negative) VAT has - rightly or wrongly - been applied. The maximum was thus 5.25%, and my reward for 2023 was more than 2½ times what I paid in VAT.

 

Noel | I have no official status; I'm just a volunteer who comes here to help other customers. My gear: Aclara SGM 1416-B Electricity-only E7 meter; Chameleon IHD3-PPMID-AAA
Jeffus
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I too got the email and wanted to change my payments to reduce the credit but it wont allow me to reduce the amount so my credit will not reduce any time soon.

Did you try asking for a refund of some of your credit as an alternative?

Emmanuelle_OVO
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Removal of the Interest Reward

 

In the past, some of our plans have been eligible for the OVO Interest Reward. Customers on these plans, who kept their energy account balance in credit, were paid interest. This interest was paid on the positive account balances that were higher than their Direct Debit amount.  

 

Due to the rule changes on where Direct Debit payments must be as accurate as possible and that we must not let credit build up excessively. The aim is for our customers’ payments to accurately cover their energy usage over 12 months – leaving them with a balance of 0. 

 

What does this mean for our customers?

 

These changes mean that it’s no longer possible for us to offer the OVO Interest Reward in a way that gives our customers the best value. Because of this, the scheme will be closing. 

 

If your account is in credit by more than 1 month's Direct Debit amount, you can now request a refund or review your Direct Debit via the online account.

 

 

 

Renewable Energy? Big Fan.
S
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So for those of us who have stored money in our account willingly we are now going to be punished by having the 5% interest earned taken away effectively putting our bills up by 5%. This was  aloyalty scheme only available to those customers who had had an account prior to a certain date. Read on to see what lhappens when you’re loyal. This was the only incentive to stay with OVO whilst every supplier was effectivley having to offer the base price due to the price cap. The amount I requested to be refunded I was told was the maximum. If I’d asked for another £1 more I wouldn’t have been allowed it. Yet I’m £2200+ in credit, I’ve requested £1500 back which is on it’s way but I think it’s unfair to now cap how much we can have back if you’re no longer wanting to pay interest out. OVO shouldn’t be allowed to have it both ways. Screw the customer then screw the customer again! If OVO really do think that this is good customer service they are offering then I’d be intersted to hear how they arrived at such a decision.

Abby_OVO
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Hey @SJM 

 

I know there are many who have seen the benefit of the Interest Rewards for some time now.

 

I just want to step in to clear up some information on the thread.

 

You are correct here in that you’d get interest on the first £1000 of credit you have on your account, if there’s more credit than £1000, then no more interest would be gained past the first £1000. 

 

I hope that clears that up a little, I’ve also linked to the really helpful webpage on the removal of the Interest Reward that may help in explaining why it’s now being removed.

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Jeffus
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I think it is worth pointing out that although any credit isn't FSCS protected, it is protected via the legislation and process around failing energy suppliers.

So you won't loose your money should a supplier go bust.

So I wouldn’t personally worry about the risk of loosing  credit in the event of a failed energy supplier.

From Ofgem:

What is the ‘Supplier of Last Resort’ (SoLR) process?

This is when Ofgem directs any gas or electricity firm to take on a failed supplier’s customers. When we choose a supplier, we must be satisfied that they can supply additional customers without significantly prejudicing their ability to continue to supply their existing customers.

We choose the new supplier following a competitive process designed to get the best deal for you. Household credit balances are protected.

S
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Also I never “stuffed overly excessive amounts into my account” the £1000 was there for the 5% return to help towards lowering the bills and the rest was there in case we had a harsh winter.

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