Energy Companies Banned From Back-Billing Customers

• Companies won’t be able to bill customers for energy used more than 12 months ago
• Back bills can exceed £10,000
• Rule will come into practice in May

Energy companies will soon be banned from back-billing customers for gas and electricity that was used more than 12 months previously.

Ofgem, the energy watchdog, said that billing customers correctly is an essential part of customer service, and large catch-up bills, which have left consumers struggling financially, or in debt to the supplier.

Rob Salter-Church, Ofgem’s interim senior partner for consumers and competition, said, “Large catch up bills can leave consumers struggling financially, or even in debt to their supplier.

“Getting billing right is an essential part of customer service, and it is unfair that consumer should be left out of pocket when, through no fault of their own, they’re issued with a shock bill from their supplier.

“So we’re taking action and banning suppliers from issuing back-bills beyond 12 months, where it’s not the customer’s fault.

“This sends a strong message to suppliers to improve the accuracy of the bills they send to their customers.”

Many customers could also save by changing energy suppliers, as it was recently found that 40% never look around for better deals, even though it could save over £250 by switching.

Last year, the average back bill that amounted to £1,160, but in some extreme cases, customers faced bills exceeding £10,000.

Back-bills occur when there has been a problem with a supplier’s billing system, or from suppliers estimating bills without using an actual meter reading, which may show the customer’s consumption is higher than expected.

Many suppliers are part of a voluntary agreement not to back-bill customers past 12 months, but this doesn’t include all companies, and those who have signed up do not always stick to it.

The ban will not apply to customers who actively prevent suppliers from taking or receiving accurate meter readings.

But consumers will now not be at fault for failing to provide meter readings.

Ofgem said suppliers will need to assess consumer behaviour on a case by case basis, if it looks like a customer is trying to avoid paying bills by not submitting readings.

The rules will come into effect at the beginning of May.

Lawrence Slade, chief executive of Energy UK, said, “Energy companies take accurate billing very seriously, and where there are problems, the majority are resolved within 24 hours.

“Suppliers are actively working to improve billing for their customers.”

The government has also been working to reduce your energy bills, by introducing a new price cap that could save you £300 a year.

Have you been affected by back bills? Let us know in the comments!