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Why Are Energy Companies Still Caning The Poorest In Society?
38 Answers
A rep appeared on BBC Breakfast just now and has any amount of justification for why direct debit customers should pay £80 per year less than coin-meter customers.
He steered clear of admitting that DD can't possibly save that amount per year (care to disabuse me of that notion?)
Has it occurred to no-one that the administrative savings of DD or, conversely the costs of the *forcible* imposition of coin-metering could *both* be spread around all customers, for a more unified energy price?
I think DD still needs to have a savings incentive element to it but why should coin-meter people shoulder the cost of bribing other customers (the "I don't trust them with direct debits" types) into switching?
I welcome your views and will catch up with the thread this evening.
He steered clear of admitting that DD can't possibly save that amount per year (care to disabuse me of that notion?)
Has it occurred to no-one that the administrative savings of DD or, conversely the costs of the *forcible* imposition of coin-metering could *both* be spread around all customers, for a more unified energy price?
I think DD still needs to have a savings incentive element to it but why should coin-meter people shoulder the cost of bribing other customers (the "I don't trust them with direct debits" types) into switching?
I welcome your views and will catch up with the thread this evening.
Answers
Actually one could argue, mikey, that the competition in the market has been a really good thing - it would have been disastrous to see a policy for fixing prices like Miliband proposed - at what price - too many countries have had problems with such umbrellas, oft used in French colonies for example, for when the price goes significantl
08:53 Tue 26th May 2015
Why?
because they can. You don't pick fights with people in a position to fight back.
The poor can't do a thing about it, so they can charge them what they like. As an articulate person in full charge of a bank account and good credit rating I have enough trouble communicating (the two-way sort) with these companies. Imagine if you're living hand to mouth, no bank account, bad credit rating.
because they can. You don't pick fights with people in a position to fight back.
The poor can't do a thing about it, so they can charge them what they like. As an articulate person in full charge of a bank account and good credit rating I have enough trouble communicating (the two-way sort) with these companies. Imagine if you're living hand to mouth, no bank account, bad credit rating.
Another aspect is debt. People who pay by DD are often paying upfront and usually keep up with their payments so that the energy companies are not spending time and money chasing debts they may not recover.
People who have to have pre payment meters are usually in debt to the company and this is one way of ensuring the debt doesn't get any bigger.
People who have to have pre payment meters are usually in debt to the company and this is one way of ensuring the debt doesn't get any bigger.
I am thoroughly disallusioned with DD with my Gas and Electric utility company.
I have a Smart Meter and know my annual energy usage over 3 years so I know what my monthy DD should be. But they put my DD up to 40% more. I now have a surplus (which means I am being their bank. This surplus will grow over the next 4 months because my heating costs will be virtually nil.
If I phone and try to get my DD reduced, they are reluctant to do so. If they do put it down, they will put it up again in a few months saying I need to build for the winter months.
I much preferred paying a quarterly bill by BACS, but they penalise you for doing so.
So I suspect the reason they get poor people to subsidise DD is because they build up huge amounts of cash from DD customers at no interest.
I have a Smart Meter and know my annual energy usage over 3 years so I know what my monthy DD should be. But they put my DD up to 40% more. I now have a surplus (which means I am being their bank. This surplus will grow over the next 4 months because my heating costs will be virtually nil.
If I phone and try to get my DD reduced, they are reluctant to do so. If they do put it down, they will put it up again in a few months saying I need to build for the winter months.
I much preferred paying a quarterly bill by BACS, but they penalise you for doing so.
So I suspect the reason they get poor people to subsidise DD is because they build up huge amounts of cash from DD customers at no interest.
I answer is that do it because they are allowed to do it.
The whole purpose of the privatisation of essential services was to allow private companies to make huge profits, and that is what happened. Another reason that the Tory government of the time brought about the legislation was to allow a small number of ordinary people to make a very small killing on the Stock Market, for the first time. The idea was that people would be so glad of this opportunity, that they would vote Tory next time, and it worked, at least until Major ran out of steam in 1997.
There is no reason whatsoever why anybody should pay different rates for the energy they use, based on their preferred method of paying. When I go to Tesco and buy my groceries, I am not charged a different price if I decide to pay with cash, a debit card or a credit card. But Tesco would charge different rates, if they thought they could get away with it !
Whether some people are finding it difficult to pay for their energy is another topic altogether. Maybe some way could be found to take the energy costs directly of the benefits received. But to charge more, to the very people that find it difficult to pay, for essential energy is immoral.
I doubt whether this will be popular with our right-wingers but there it is !
The whole purpose of the privatisation of essential services was to allow private companies to make huge profits, and that is what happened. Another reason that the Tory government of the time brought about the legislation was to allow a small number of ordinary people to make a very small killing on the Stock Market, for the first time. The idea was that people would be so glad of this opportunity, that they would vote Tory next time, and it worked, at least until Major ran out of steam in 1997.
There is no reason whatsoever why anybody should pay different rates for the energy they use, based on their preferred method of paying. When I go to Tesco and buy my groceries, I am not charged a different price if I decide to pay with cash, a debit card or a credit card. But Tesco would charge different rates, if they thought they could get away with it !
Whether some people are finding it difficult to pay for their energy is another topic altogether. Maybe some way could be found to take the energy costs directly of the benefits received. But to charge more, to the very people that find it difficult to pay, for essential energy is immoral.
I doubt whether this will be popular with our right-wingers but there it is !
I have tenants who WANT to be on meters and want pay the difference as they know where they are at any point in time
The utilities charge more as they can identify a set that incurs them higher running costs ( that is anyone on a meter - tend to be bad payers )
and finally - a lot of meters have standing charges, so if you are in arrears then only use the leccy before your landlord kicks you out - and then refuse to pay the gas standing charge on the grounds that you havent used any !
It is clear from the above that I am speaking from experiencel
and not as some lardy dah politician in the commons
The utilities charge more as they can identify a set that incurs them higher running costs ( that is anyone on a meter - tend to be bad payers )
and finally - a lot of meters have standing charges, so if you are in arrears then only use the leccy before your landlord kicks you out - and then refuse to pay the gas standing charge on the grounds that you havent used any !
It is clear from the above that I am speaking from experiencel
and not as some lardy dah politician in the commons
PP...standing charges should have been outlawed a long time ago. They were introduced when electricity and gas was first spreading out into the country, and have no place in modern society. If you haven't used any energy, you shouldn't be paying the energy company anything.
If I don't fill my car up with diesel for 2 weeks, while it is sat in my drive because I am off on holiday, my local garage doesn't expect me to slip them a couple of quid when I return.
If I don't fill my car up with diesel for 2 weeks, while it is sat in my drive because I am off on holiday, my local garage doesn't expect me to slip them a couple of quid when I return.
@Gromit
Yes, I am also my energy company's bank at the moment. Last phone call I got snarled up by their circular argument about why I needed to be paid up one month in advance.
Hard to recall the details but I recall a time when the sequence was
1. Use electricity/gas
2. Develop arrears on accout
3. Monthly payment settles arrears, leaving a balance of under £5.
4. Repeat.
It now appears to be
1. Pay a month in advance
2. Use electricity/gas
3. Pay again, for consumption in 2.
4. End of month, balance is in credit to energyco by at least one month's debit.
5. Winter comes and goes. Account still in excessive credit (£50-60) in April, when the heating is barely running.
I can see there was a transition but somehow did not notice a double debit or it was a gradual accumulation of credit over a number of years. It shouldn't be because I asked for a refund of excess on one occasion and a debit reduction on a separate occasion.
Ten million customers, £60 quid each. Does that cover their executives' salaries and the shareholder payout?
Yes, I am also my energy company's bank at the moment. Last phone call I got snarled up by their circular argument about why I needed to be paid up one month in advance.
Hard to recall the details but I recall a time when the sequence was
1. Use electricity/gas
2. Develop arrears on accout
3. Monthly payment settles arrears, leaving a balance of under £5.
4. Repeat.
It now appears to be
1. Pay a month in advance
2. Use electricity/gas
3. Pay again, for consumption in 2.
4. End of month, balance is in credit to energyco by at least one month's debit.
5. Winter comes and goes. Account still in excessive credit (£50-60) in April, when the heating is barely running.
I can see there was a transition but somehow did not notice a double debit or it was a gradual accumulation of credit over a number of years. It shouldn't be because I asked for a refund of excess on one occasion and a debit reduction on a separate occasion.
Ten million customers, £60 quid each. Does that cover their executives' salaries and the shareholder payout?
Naomi...you have asked that question before and the answer remains the same. When Labour were swept to power in 1997, they were not in a position to renationalise essential services, as there were more important areas of spending required. After all, the main reason that they won the land-slide election was that Major has mismanaged the economy.
They could, of course, renationalise without compensation but the political drive for that petered out in the 50's and 60's.....mores the pity.
They could, of course, renationalise without compensation but the political drive for that petered out in the 50's and 60's.....mores the pity.
The meters for all you middle class users are either card or key
I dont think any have coins. and I dont think... // why should coin-meter people shoulder the cost of bribing other customers// is what is going on
coin meter users are shouldering the cost of more expensive coin meters to put in ( £125) and to run.
There is also an extra expense for cheque and paper users ( me) which I object to - especially as I am British Gas and was forced to pay £635 for a bill I had already paid. As Paul Lewis said on Money Box live: write to the CEO so I wrote to someone at Lakeside, 31 Causeway Staines and complained. I also complained to the Lady of the House and told her she should transfer her bills from her husbands company to comething like Scottish Power. Response I would say - very slow - I think I got in about six ( letters )
I dont think any have coins. and I dont think... // why should coin-meter people shoulder the cost of bribing other customers// is what is going on
coin meter users are shouldering the cost of more expensive coin meters to put in ( £125) and to run.
There is also an extra expense for cheque and paper users ( me) which I object to - especially as I am British Gas and was forced to pay £635 for a bill I had already paid. As Paul Lewis said on Money Box live: write to the CEO so I wrote to someone at Lakeside, 31 Causeway Staines and complained. I also complained to the Lady of the House and told her she should transfer her bills from her husbands company to comething like Scottish Power. Response I would say - very slow - I think I got in about six ( letters )
Why should I pay for people with very poor credit? I don't mind for those with difficult circumstances like old folk, single mums etc, but for a lot of folk out there, impulsion has led them into poor credit situations. It's no different to say insurance or the loans industry, poor credit and you pay.
Naomi...the Party that you didn't support at the time, but don't now, introduced the privatisation of the energy companies. When you are looking for the original fault, its always best to go back to the beginning. The Tories started all this off...if its going tits up now, then it was their fault in the first place.
Nobody much now argues that the privatisation program was a success. But perhaps you do.
Nobody much now argues that the privatisation program was a success. But perhaps you do.
Mikey - great one - // PP...standing charges should have been outlawed a long time ago.//
and the reality is - they havent, and they are there
In fact - I regard these threads as having an educational thread - the only utility whose meter does not have a standing charge is - - - Utilita
and further educationally
a landlord should never give permission to change to a meter as the company will chase him contractually for the short fall
You have some people Mikey who wont pay bills as well as cant - and they are all in the meter set
and the reality is - they havent, and they are there
In fact - I regard these threads as having an educational thread - the only utility whose meter does not have a standing charge is - - - Utilita
and further educationally
a landlord should never give permission to change to a meter as the company will chase him contractually for the short fall
You have some people Mikey who wont pay bills as well as cant - and they are all in the meter set
mikey, standing charges are there to cover the cost of installation etc - yes, they could remove them but then the price of the utility would have to go up. Your argument on the car is spurious as you have the cost of the capital on buying the car and insurance/tax etc to pay, either as a notional charge if you paid for the car in cash or the monthly credit fee. How much petrol or diesel you use is your affair, just as is the amount of gas, water or tricity is.
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