Power giants 'owe millions to customers'

Power giants 'owe millions to customers'

www.thisismoney.co.uk

Britain's 'big six' energy giants should be made to pay back millions of pounds to customers using pre-payment meters, says the Government's new consumer watchdog.

Consumer Focus says the 5.9m households with the meters have been systematically 'ripped off' for years.

Energy suppliers are collecting a staggering £700m extra a year by inflating charges to these customers.

Customers with pre-payment meters (PPMs) pay an average of £1,315 - £244 a year more for heat and light than someone on the cheapest online tariff.

(visit the link for the full news article)

This story was printed in todays Daily mail, but I had a hard time finding the same article on their website;
www.dailymail.co.uk...

Even doing a search with the term 'power giants' failed to turn up the article.

Is this a deliberate attempt to keep this news off the internet or to, at least, reduce the amount of people who get to read it?
Would this news affect prices (shares) if this was global news.

IMO, this type of thing is far more drastic and in need of urgent attention than anything the US presidential elections could ever give us and is definitely more important than princess Bea slumming it on the streets outside a pub.

If this story turn up trumps with ofgem, what can we really expect to see happen.

I have been one of these PPM customers before (several years ag now) and was astonished by how fast I had to keep topping up the meter. It almost made me afraid to switch a light on. How these low income families are managing and how these 'fat cat' corporations can get away with this sort of thing just numbs my mind.

But it don't make it numb enough not to report on it though


www.thisismoney.co.uk
(visit the link for the full news article)

Look im sure its probably a scam.
Im sure they probably make more profits from it than usual like the greedy evil pigs they are.
However if you think about it, it could stop people getting into debt.
If they cant afford the heater on they put blankets on instead.
If they cant afford the light on they light a candle instead.
If it wasn't pre paid they would just switch it all on out of convenience and end up with 1000's in debt they cant afford to pay and would get it all cut off.

Originally posted by Interestinggg
Look im sure its probably a scam.
Im sure they probably make more profits from it than usual like the greedy evil pigs they are.
However if you think about it, it could stop people getting into debt.
If they cant afford the heater on they put blankets on instead.
If they cant afford the light on they light a candle instead.
If it wasn't pre paid they would just switch it all on out of convenience and end up with 1000's in debt they cant afford to pay and would get it all cut off.

You make some fair comments about, say using blankets or putting a jumper on &c rather than putting the heating on, although I'm not sure how you get around heating water and cooking for example.

When I moved to where I live now, there was a payment meter already installed and the electric company at the time wanted several hundred pounds to have the meter removed and my switching to a regular service. I don't know whether it's the same deal now, but it was similar to a credit check which was against an address rather than an individual. At the time, it was really convenient as I could just walk to a nearby machine that was accessible 24 hours a day and put in a couple of pounds whenever my reading got low.

Then the after a couple of years, the nature of the prepayment changed. It went from simply putting coins into a slot and getting a card with a magnetic strip on which you placed into the metre and then disposed of it to a swipe card system which you could only use in certain shops and obviously use only during shop hours. I kicked-up a fuss and threatened all sorts and eventually switched to a different company who removed the meter as long as I signed up for a guaranteed year or something.

The actual card and the convenience wasn't the only change, which leads to the real issue here: the actual tariffs for prepayments changed too. The prepayment systems that have been in use for the last 10 or so years actually have the users paying more for a unit of electricity than those who pay regular bills.

You can say it stops people getting into debt because they're only paying for what they use, but, as it stands, all it does is increase the debts of those already with them because they're actually paying more for what they use than anyone else.

I'm not sure how this can actually be justified.

The way fuel bills are in Britain, you don't have to extravagant with the gas or the electricity to rack-up ridiculously high bills in the first place.

[edit on 29-9-2008 by Merriman Weir]

reply to post by Merriman Weir


Nice post Merriman.

I'm glad you had all that info tucked away in the old grey matter.
It has helped to shed a bit more light on the issue and practices that affect many.

It's plainly obvious that these companies have reduced the costs of cash retrieval whilst maintaining a high charge.

The cost of collecting cash from those who can supply the 'top-up' must be higher than making an automated swipe card system.
Then they came out with those plastic keys you charged up.

That can mean only one thing.. it's cheaper, in the long term, to make longer lasting plastic data keys than it is to have to continuously issue new paper tickets. Priniting companies must have been demanding mega bucks for the service

So it goes on.. away from the cash to almost zero outlay, whilst keeping up appearances and charging everyone the earth.

Electricity hasn't changed since it went 'live', but for some reason we still pay more now than ever before...

reply to post by Extralien


The answer as to what action should be taken by the power companies to assist those with PP meters and/or facing energy-poverty is staggeringly simple..

Rather than hand out the money, the many millions of £s should be invested in solar thermal and PV energy systems and then leased at a low-cost rate to consumers, with those on 'social tarriffs' , prepay meters, and the elderly/vulnrable being made priority applicants to such a scheme.

Whilst the lure of a cash-back windfall may seem more immediately attractive to some, a low-cost lease-purchase plan would make more sense as the renewable energy technology would enable a consumer to make savings for many years to come.

Not only that, but such a large-scale investment in solar-renewables would create an 'economy of scale' thereby driving down the market price per solar module unit, making it more affordable technology for all

It's been estimated that 1-in-6 households in the UK are facing energy-poverty (defined as 10%+ of household income spent on energy bills) and such a scheme would not only alleviate that fuel-poverty, but also enable the UK to reach it's renewable-energy targets of 15% of total grid-supply by 2020

A prime example of just how well such a scheme can work is Primrose Hill Solar Villiage case study (pdf) in West Yorkshire

This scheme has been a total success and accounts for 5% of all the PV installations in the UK, and has had the knock-on effect of enabling those on low incomes to keep a higher proportion of that income to be spent on other day-to-day essentials that have seen inflationary price increases (ie: food)



[edit on 29-9-2008 by citizen smith]

Prepayment meters? I thought they where doing well with ripping us off without them.

"Oh look, there *might* be an energy shortage, you need to pay more!"
"Hm... It seem that the shortage never happened. There's an abundance now, and you need to pay more because so we can cover our costs for this!"
"NO WAIT, THERES A SHORTAGE! PAY MORE. NOW."
"Shortage? I never said anything about a shortage. No we've remade the billing system. It only looks like you're paying much more, but in reality we're just charging a little extra"
"Oh no... Here's comes that shortage again... Pay more now so we can give you electricity next year"
"Yes there *is* a shortage. It just havent shown yet. Maybe later. Come back later. But pay a little more now please."

The electricity companies are making record earnings. Gee, I wonder why?

Just wait until the French move into the execs offices at the nuclear power plants they have just bought, then we will see what shortages are about. Something along the lines of " The French own them, run them and the French are going to get the electricity from them"

This is the type of thing they don't want us to have;

Free energy part 1
Free energy part 2
Free energy part 3

We are on a meter for Gas and electric and it really is a massive rip-off.

Putting a jumper on and such things, is a very valid point, but washing in cold water or sitting in the dark is no fun at all.

They are also taking money off of us from an unpaid bill from a couple of years ago. Even though there were different people (bar one) living here then. They seem to think we owe them £400, and are taking it off whatever money we put on the gas. Even though we have been doing that since we got the meter installed, 18 months ago. It's a complete farce.

Unfortunately, we don't have much choice.

It just makes me very angry.

They are supposedly reviewing the account.

Originally posted by Extralien
reply to post by Merriman Weir

 

Nice post Merriman.

I'm glad you had all that info tucked away in the old grey matter.
It has helped to shed a bit more light on the issue and practices that affect many.

It's plainly obvious that these companies have reduced the costs of cash retrieval whilst maintaining a high charge.

The cost of collecting cash from those who can supply the 'top-up' must be higher than making an automated swipe card system.
Then they came out with those plastic keys you charged up.

That can mean only one thing.. it's cheaper, in the long term, to make longer lasting plastic data keys than it is to have to continuously issue new paper tickets. Priniting companies must have been demanding mega bucks for the service

Oh yes, I agree with the issue of cost regarding the little ticket things. Funnily enough, I kept a few when I had the meter removed. They must have been fairly cost-ineffective considering the relatively small payments being put on them. So I don't actually blame the electric suppliers for wanting to put an end to that particular method of delivery.

Electricity hasn't changed since it went 'live', but for some reason we still pay more now than ever before...

That's the galling thing about the whole issue. I'd be genuinely interested in knowing what kind of infrastructure investment is made to the National Grid in contrast to profits. Yes, there's upkeep and occasionally it must get expanded upon - although obviously expansion can't happen indefinitely due to the finite landscape - but still...

I know it's an unpopular idea (American Republicans look away now!), but I honestly would like to see the utilities in this country nationalised.

Originally posted by citizen smith

It's been estimated that 1-in-6 households in the UK are facing energy-poverty (defined as 10%+ of household income spent on energy bills) and such a scheme would not only alleviate that fuel-poverty, but also enable the UK to reach it's renewable-energy targets of 15% of total grid-supply by 2020

Fuel poverty is a serious issue that's just not getting the coverage that it deserves, and, like a lot of things, it really won't until it's affecting more than just the 'proles'. The idea of having to choose between 'eating and heating' must seem very quaint and provincial to the people that this isn't actually an issue for yet.

Unfortunately, the government and industry watchdogs can state these targets, but ultimately it's not really in the industry's interests to actually meet them. There's no money in these kinds of targets for them and, at present, ombudsmen in this country are neither 'use nor ornament'. The fact that Ofgem aren't the ones making the statement in the OP's newspaper story, but rather a consumer group, underlines the fact.

I'm actually thinking of getting one of those mini-turbines just for charging things like batteries &c.