Why do I need to have a direct debit to sign up to Power Move?

The reason behind Power Move and other schemes of that sort, is to persuade people to use less electricity during the ‘dirtiest’ generation periods. We could just do that anyway and not get paid, just get a warm feeling that we’ve helped a tiny bit.

I’m sorry for the long read here (double apology to those who have already suffered from my long replies).

I’ve had a bit of research into why people do or don’t like direct debits and what I have found is there are a lot of grey areas where the system can catch you out and you end up with a DD payment when you were not expecting it and the consequences of that. Again, the link is from Martin Lewis’ MoneySavingExpert forum where the subject is discussed in quite considerable depth and I learnt quite a lot from that. T&Cs change all the time (I get about one email a month on this subject) and not everyone reads and fully understands them. One which I was sort of aware of, but hadn’t read about in the T&C changes notice, is that a DD can be taken on a range of dates (to avoid ‘difficult’ transaction dates) before or after the date that you specify with your supplier.

https://forums.moneysavingexpert.com/discussion/874715/why-dont-people-use-direct-debit

I suspect that OVO, in restricting certain products and Add-ons to those who choose to pay by DD, was coming into line with other energy suppliers rather than being the first one to do this. @Blastoise186  pointed out that certain tariffs are not available if you don’t pay by DD and this is in common with other energy suppliers. Martin Lewis implies this in the previous link I gave when he said that those who choose not to pay by DD can expect to pay about 6% more for their energy than those who do. In my case, as a heavy user with an EV and a yearly bill of around £1,500, that would amount to about £90 a year. I can understand that some people don’t like the fundamental concept of a company being able to withdraw funds from their account without the specific and individual permission to do so. On the other hand there are advantages of not using DD, as was stated by someone on the forum. By forcing yourself to deal with each and every transaction you have to be closely involved with your accounts all the time so you are acutely aware of your financial situation at all times. If you hold a minimal amount of funds in your current account at any one time then that is probably a prerequisite to avoid becoming overdrawn.

Anyway, us volunteers have a meeting coming up soon and I’ve tabled a question about where OVO is, relative to other energy suppliers, regarding the restriction of products and Add-Ons (like Power Move and others) if you don’t pay by DD. Because of Martin’s comment earlier I’m not expecting OVO to be out of line with the others. If it’s widespread and you still consider this to be unfair then you can always write to Ofgem to say this is an unfair practice and get them to make a comment on that.

However, there is a similar situation amongst High Street retailers at the moment where you can’t get discounts on selected products unless you have a discount/points card linked to an online account and sometimes an App. You could call this a form of discrimination as it affects people who don’t have an online presence or have a smart phone to run the app. In the link below MSE talk about it but don’t give an answer which is unusual so I think it implies that there is no way to formally complain about this but it does show there are alternative places to shop that don’t require an online presence to get discounts.

https://www.moneysavingexpert.com/news/2022/03/elderly-and-vulnerable-are-being--left-out--on-supermarket-deals/

I’ll come back here regarding what I find out in the meeting, assuming that they will want to talk about it then as the meeting is for another reason.

Peter

I’ve never known a DD be taken earlier than expected, and I don’t think it can happen, for fairly obvious reasons. After the due date, yes, because DDs can only be taken on a banking day. My own is due today Sunday, but it won’t actually be taken until tomorrow Monday.

@Firedog I’ve never known them take them early but apparently they can. But they have to give you sufficient notice in advance. Nothing appears to be specified as to how much they can vary the date or the notice they have to give you. The last paragraph doesn’t exclude bringing the date forward.

The DD Guarantee prohibits early collection, but permits late collection.

Most suppliers have some sort of scheme for encouraging usage towards low usage periods so you may well find a supplier better suited to your personal situation and usage pattern. Many of the schemes are linked to the Nation Grid DFS.

Here is an example 

https://www.britishgas.co.uk/energy/peak-save.html

Here is a recent summary of many of the schemes

https://www.moneysavingexpert.com/utilities/cut-energy-demand-flexibility-service

Does one of these look better for you, including the specific terms and conditions?

It would be interesting to hear if any other supplier has a more suitable scheme for you, without the limitations you have found with ovo.

The faster switching service means switching suppliers is pretty quick and reliable these days.

If you feel strongly about what is being offered by suppliers your best bet is to contribute to one of the frequent ofgem consultations published on the ofgem website.

Lets be absolutely honest, they like the interest they get from the vredit in customers accounts for their share holders 🤑

You know ​@Sally123 , if you’re gonna post One-Liners like that… You should be ready to be challenged. So, where’s your proof of your claims?

I’ll be nice and give you 24 hours. If you can’t provide it, I’ll be able to tear your claims apart.

Here’s a clue though: how do you know that the funds are even being held in an interest bearing account anyway? There are accounts that have permanent 0% credit interest after all!

Well, more than 24 hours have passed and no response from the user. Typical...

Long story short, whatever interest OVO might be earning on customer credit balances - assuming said balances are even in an interest bearing account in the first place - are likely offsetting bank charges for operating a business bank account (trust me, they’re NOT FREE!!!) and/or some of the processing fees that GoCardless charges OVO for providing the services of processing those Direct Debits on OVO’s behalf.

It’s also worth mentioning that at any given time, GoCardless also swallows some of that cash for itself and holds it in a reserve to comply with financial regulations. OVO CANNOT access any funds held in such reserves until they get released - after which point they get handed over on the next payout run.

Shareholders also only get payouts from profits that the company makes - by law they cannot help themselves to customer credit balances under ANY circumstances whatsoever, not least because OVO MUST promptly return customer credit balances to the customer on-demand if/when the need to hold onto it no longer exists.

Want to prove me wrong? Show me evidence to back up your claims.