Cancelling Direct Debit - how much extra for standard variable payment on demand?

Cheaper method to process the payments…. What exactly are the additional costs to OVO if I go online every month and pay online? Is it really £20 a month more???? Think not ….. but they gotta make their profits !?!? 
 

I also know this is all energy company policy  and not just OVO 

I can’t face searching through the forum for a full explanation of why it’s cheaper but someone has written it all out beautifully.

For the  price cap it is actually ofgem that set the upper cap prices for the different payment methods.

They work out what the extra costs are. 

Unfortunately it does cost more to service people who pay on receipt of bill. A significant number of people in this category need chasing multiple times. It is a shame that impacts others but that is the reality. A lot of people don't go online and pay in time. 

The price cap rates for pre payment meters are particularly hard given these are often the poorest people. Some suppliers including OVO have campaigned for changes for pre payment meters.

Ive always paid by direct debit but last year bought my dads home after he passed away. Sold my home and took over dads account. Its only a bungalow and just me so I took over the account and said I would pay as he did (on demand)

For me this is brilliant. I can see how much I use and have the money saved in my savings account and pay as soon as monthly bill is ready. I pay approx £60 a month electric and yet when I enquired about DD Ovo wanted £280 a month

I understand dd unit price is lower but realistically I want the money in my bank account and for me its certainly so much easier

Well I have cancelled my direct debit with my bank  and will try to contact them again to let them know,,,, I’m assuming though that my tariff won’t be changed to the higher non DD rate until my account is at £0 , as that £449 was collected via DD? 

Incorrect. Your tariff will be changed immediately to Simpler Energy On-Demand and be immediately more expensive than it was before. You don’t get to keep the cheaper rates if you cancel the DD, regardless of how much credit is still in your account.

If you want to keep the cheaper rates, you must re-instate the DD.

I’ve been browsing through the previous threads and it is obvious that people are getting really irate with power companies in general.  My OVO account informs me that I am using 14% less electricity and 28% less gas than I did last year.  I am currently £731 pounds in credit whilst paying £130 per month and my £66 from HM Gov’t goes straight back into the account.

The last 3 month bills have been (on average) £85, with this month currently about £115 due to CH usage. Taking all that into account my latest warning from OVO says that I need to increase my monthly DD to £135 per month.  That is the last straw.

I know it’s biting off my own nose etc….., but I’m going to monthly bills as I’d rather have control of my money.

Also, having one of the ‘helpers’ on this forum say that the costs go up for monthly billing is because people don’t pay their bills and have to be chased………..Speechless

It is true that paying On-Demand carries increased risk of non-payment though and those costs have to be recovered somehow.

The increased tariff rates also factor in the extra admin time and costs involved with supporting that type of payment method. It’s harder to fully automate On-Demand billing than it is for Direct Debit billing. One can be fully automated all the way through, the other often requires human involvement.

Hey @jimgamgee1ring,

You can request a refund at any time of your surplus credit by contacting Support, you’ll need to keep one months direct debit on your account as you pay monthly, in advance.

You can find out how your direct debit is calculated by using the direct debit calculator tool on the Online Account:

If you feel the estimate for your direct debit is too high, our Collections Team can put a hold on your account for three months, meaning your direct debit will not be reviewed for this period.

Do you submit regular readings? Or have a smart meter? If not, I'd advise getting one installed. If we don’t get regular readings, that means your estimated annual consumption (Which your direct debit is based of) will be estimated. 

OFGEM regulates suppliers and the reason the prices are higher for manual payers, is because they recognize that it costs more for energy companies when customers pay this way (due to communications having to be sent to chase payment, and also non-payment and bad debt). 

Hope this helps. 

This really is so much smoke and mirrors. I, and I daresay millions of other consumers have paid their quarterly bills without fail by direct debit for a decade or more.  It was a standing order before that, forgotten how that worked.  You received a bill and paid what you owed.  I simply fail to believe the rubbish that we honest consumers should be penalised and lumped in with small minority of delinquent customers.  OVO can institute a late payment fine system.  We regular customers should be entitled to pay on demand by DD  without premium cost.  I simply dont believe we present a cost premium of £200/pa. Its all done by computer so your get up to date readings and can calculate a monthly bill - no admin overhead.  Never mind you trying to take care of customers accounts (and swell your cash flow).  We want to look after ourselves like we used to do without problem  Tell the truth or lets get Ofgem onto the case