Picture the scene. You’re having a lovely relaxing morning, enjoying a cuppa and planning your day.
Then an energy bill lands through your letterbox. You aren’t worried because you’re in credit at the moment, despite forking out high monthly payments over winter. You open the letter and your energy supplier tells you that you are in debt. By thousands of pounds.
This scenario is one that occurs far, far too often each year. You may have seen some cases in the Mirror where people were charged ludicrous sums for recalculated energy bills. Artist and national treasure Grayson Perry famously received 15 bills charging him a total of £39,000. Payable immediately.
There are a number of reasons why people sometimes receive astronomical energy bills. Sometimes it’s because of computer errors. But more often than not, it’s because of back billing. A practice banned by Ofgem, but one that occurs so much that the regulator has just been forced to issue yet another warning to energy businesses about the practice.
Sometimes energy suppliers suspect that the meter readings they have for you are incorrect. When they obtain new information or correct an error, like receiving an actual meter reading or replacing a faulty meter, they recalculate your bill.
This is known as ‘back billing’ or a ‘catch up bill’. The supplier works out what you should have paid based on the new information available and issues you a new bill for any outstanding amount. This could involve you going in to credit.
But in thousands of cases every year, it involves sudden debts appearing on your account, often with little notice or explanation. The bill stretches back in time to cover energy units that the business says you should have been charged for, even though it’s not your fault. But it can’t go back too far.
Energy companies rely on estimated readings if they aren’t able to get an actual meter reading from you or your meter. Despite there being 37 million smart meters – which are supposed to send meter information – that’s only 65% of all meters. And 4.3 million of them aren’t working properly (that we know of).
The pandemic meant that many meters went unread for over two years – and for quite some time after that. In addition, many of the first generation smart meters were faulty and were replaced, which led to some energy suppliers (including ones that are out of business) to estimate your energy consumption.
A number of people have reported cases where the energy firm’s computers might reject an actual meter reading, if it doesn’t think that it ‘fits’ its assessment of your energy consumption. This is why your bill might use estimates even though you have given actual readings or your smart meter is transmitting the correct data.
The regulator Ofgem has stringent rules about back billing. These state:
Ofgem’s rules state you cannot be charged for energy used more than 12 months ago if:
Of course, you don’t get to work the system! You can’t just hide behind the sofa when the person comes to read your meter. The rules do not apply if you have acted unreasonably by:
I thought you’d never ask! Imagine your energy supplier decides that it has been charging you incorrectly for three years. It spots a meter reading from 2022 and works out that you owe £3,000 up to the present day. It sends you a bill for an extra £3,000.
But that’s three years of energy it’s back billed you for when it’s only allowed to charge you for one. All you’ve used in the last year is £1,000 extra in energy. Therefore, the business has incorrectly back billed you £2,000 and you don’t have to pay that.
Despite Ofgem’s firm disapproval of back billing and repeated warnings, back billing is very widespread indeed. In fact, it’s one of the most complained-about issues that readers get in touch with the Mirror about. What is particularly worrying is many back bills that aren’t obviously incorrect go unnoticed by people who are forced to pay them. As a consequence, we have no idea how many people have been ‘accidentally’ back billed by energy suppliers over the years.
This is compounded by the fact that energy bills are so devilishly complicated to understand. I’m currently investigating a complaint that I’ve spent 14 hours on so far, trying to untangle five years of bills and I’m none the wiser about where the errors have taken place. That’s because in order to know you’ve been treated unfairly, you need to know the exact dates that a business is billing you for and the readings it is using to back bill you.
The same goes for back billing refunds. Again, because of the complexity of energy bill calculations, it’s impossible to know if a recalculated bill is fair or accurate if the method for working out the refund is not provided on the bill. Some suppliers may argue that they have attempted to contact you, but you ignored their requests for a meter reading. However, it’s not that simple.
For example, your meter may be in an inaccessible place or usage to reach. You may have a smart meter that hasn’t been sending the right readings. Or you may have called the business or used its app or website, to log correct readings but it hasn’t entered them in to the system.
If you receive a bill out of the blue that recalculates what you owe, don’t panic. Look at the dates that the bill covers. This may not be obvious as the bill may be broken down in to separate billing periods or changes in your tariff and its price. Don’t be blinded by the science.
Look at the total amount it says is outstanding. Now look at the date on the bill and the earliest date on the bill that it has been recalculated from. Next, look to see if any money has been deducted for ‘back billing’. If the amount still seems too high, then don’t worry about working it out – it’s far too hard to do this.
Ask the business to investigate the recalculated bill as a complaint. Say you want a full written response showing the readings and calculations it has used to work out exactly what you owe. This should show if you have been back billed or not. If you are disputing a back billing refund, ask for the same details in writing too.
You don’t have to become an expert to dispute a bill. If it doesn’t seem right, the business should be explaining how your bill has been calculated in plain English. So ask questions like:
Be prepared to provide details of your personal situation too. If you don’t work from home, or live by yourself, you should not be using high levels of energy. It’s the job of your energy company to look in to any faulty meter issues (see below) but they should investigate your complaint fully and respond in writing.
Again, if you don’t understand anything in the response ask for this to be clarified. If the bill still doesn’t seem right, tell the firm you are going to the Energy Ombudsman and ask them to suspend any collections procedures while the matter is being looked in to.
Energy businesses are obliged to address all complaints in writing unless you agree otherwise. Their ‘final response’ should set out what they’ve done to resolve your complaint and any compensation that they might be offering. This should also tell you about your right to go to the Energy Ombudsman. The Energy Ombudsman is a completely unbiased, free service and it’s really easy to make a complaint online. Find out more at https://www.energyombudsman.org/
At Reach and across our entities we and our partners use information collected through cookies and other identifiers from your device to improve experience on our site, analyse how it is used and to show personalised advertising. You can opt out of the sale or sharing of your data, at any time clicking the “Do Not Sell or Share my Data” button at the bottom of the webpage. Please note that your preferences are browser specific. Use of our website and any of our services represents your acceptance of the use of cookies and consent to the practices described in our Privacy Notice and Cookie Notice.
