Unexplained change to direct debits?

That’s not what the terms and conditions say:
  

Ofgem is leaning on suppliers to (a) prevent customers going into debt and (b) prevent customers from building up large credit balances. They also say that

I’m not convinced that OVO have got this right.

Hello ​@Firedog,

The rules have changed over the years. To be honest they only paid it lip service, and it quickly degenerated to large surplus payments.

In defence of Ovo they did attempt to introduce interest payments which would probably have created a fairer system, but I understand this was blocked by Ofgem.

With regard to the Ofgem position on this, how do they intend to create and maintain a ‘close to zero balance’ on something that varies wildly between seasons without positive/negative balance, varying the payment, or creating unfair surplus. 

That depends on what you mean by fair, and that’s probably the biggest bone of contention. The situation is substantially different for dual-fuel customers, whose gas usage may swing wildly from summer to winter. Electricity-only customers probably see less violent swings. 

One factor often overlooked is the date the DD is taken. If the DD represents an average month’s usage, the balance at the end of a month as shown on the DD calculator’s chart will vary from low if the DD is taken early in the month to high if it’s taken at the end, so an alarming balance chart with negative figures can be made less so simply by changing the DD date. A better solution might be an injection of cash now amounting to the biggest negative balance the chart shows, typically at the end of March.   

Some suppliers allow payment by variable DD, each month’s payment amounting to the bill, with a couple of weeks allowed for payment much like many mobile phone plans. This is a popular arrangement, but it does carry a greater risk for the supplier. I wonder how many of these payments fail in January, when the year’s biggest bill coincides with the year’s lowest bank account balance.

It’s a tricky puzzle to solve, so it’s not surprising that suppliers like OVO move the goalposts every so often with a view to patching one deficiency, only to find that the system falls down somewhere else.  

That was good. Even it was very little money, it kept me encouraged to keep a bigger balance. I as a customer need some kind of encouragement to keep my balance in credit. Otherwise I will be keeping it just enough to cover my next bill.

Clearly this is widespread and disadvantages customers whilst all the benefits are OVO’s 

I signed up to a 1 year fixed tariff in August and up until the end of October my estimated used was up to August 25. At the beginning of November my recommended DD went up and I noticed like others that the estimated energy period had switched to March 26. 

last week I got an email saying my DD was being revised and within minutes got an email saying that the DD’s had changed. 

I am now looking at switching to Octopus energy as I believe that OVO have breached the terms and conditions of the contract that I signed up to in that my account will not be in debt at the end of the contract period ie August 2025 not March 2026. I have enclosed the detail below. 
 

i would appreciate someone from OVO confirming that I will not be charged the £50 per fuel for moving my account early due to OVO breeching the contract. 
 

This is NOT a breach of contract on OVO’s part. As such, you can’t have the Exit Fee waived under that rule - if you leave, you will be subject to any Early Exit Fee that may apply to your tariff.

So OVO can increase the DD without any notice and base the increase on an estimate of time outside my contract with them, both issues set out in their terms and conditions that I pasted earlier. 
if that’s not a breach in terms and therefore a breach in contract, I’m not sure what is. 
So many people are being caught out by extending the period of the estimated usage. For me and thousands like me the estimate includes two winters in an 18 month period. It seems to me it’s just a way of boosting profits by using customers money to gain interest. 
if I agreed to the increase suggested I would be in credit by around £300 at my contract end date in August, where the terms clearly state that the estimate is to ensure I have a nil balance at my contract end date. 
Lots being said about this practice in the press. 

Where? Do you have links to press reports about this change?

I agree that this is in breach of the T&Cs on several counts, but I can’t see any way forward to challenge it. I suspect that any official complaint would simply be resolved by allowing for a more reasonable DD, so there wouldn’t be any cause to escalate the complaint to the ombudsman. I was rather hoping that ​@MCH59‘s hotline to Ofgem might spur someone into action, but sadly he’s jumped ship.  
 

Hi, thanks for your replies + posts re. OVO's strategy to prematurely fill their coffers prior to anno 2026 - by increasing DDs.

Following my "enforced" variable tariff DD-hike of £11 p/m in early Nov '24, as I would "allegedly" be in debt by £165 in 1.5 years …

... I called the OVO team and explained:

"As long as my dual fuel credit remains at approx. £200+ (as it has done, and higher, for years) and does not dip lower than £100 this winter, energy providers should not increase DDs without the customer's agreement! I am perfectly able to 'up' my monthly DD on the app should I feel my safety buffer credit has decreased by too much!"

The friendly OVO customer service lady obliged and reset my DD to the current amount. Thanks!

I’m glad to hear this was resolved ​@Sanka14 😊