Energy firms are sending households notice of the vastly higher direct debits they will pay within days – despite the Government’s cost-of-living help package and price freeze.
E.On customers were among those to raise a flurry of complaints on social media on Thursday as the firm sent emails detailing significantly increased payments, even for those whose accounts are in credit.
Customers have little time to prepare, with the higher payments taking effect from as early as the beginning of October.
One customer, Danny Stuart, wrote: “Anyone else got an email from their energy supplier, massively increasing their direct debit from 1 October? So much for things staying the same! I thought the cap announced would see prices freeze.”
Marija Lewis posted: “Wow @eon_next please could you explain this? My bill for last month was £97 (yes we are really scaling back and rarely home). Based on new prices it would have been £118. You are putting up my direct debit from £180 to £458???”
The emails led to confusion as they did not make clear if the Government’s £400 payment to all households to offset higher prices – to be automatically deducted from accounts in £66 and £67 monthly amounts from October to March – had already been applied to the higher direct debits.
The average household energy bill will rise from £1,971 to a frozen £2,500 on October 1 under the energy price guarantee announced by Prime Minister Liz Truss earlier this month.
This is an increase of 27% from the previous price cap, which limited the rate providers can charge customers on a standard variable tariff.
Overall, household bills will still be 96% higher than last year.
An E.On spokesman said: “We’re contacting customers to explain recent changes in the energy market and how their bills and direct debit amounts will change from October 1.
“This includes details of the Government’s Energy Price Guarantee (EPG), which sets the price of energy across the country, and the previously announced Energy Bills Support Scheme which will cut bills by a further £400.
“As ever, any customer with a query can get in touch to discuss their account directly and we have detailed information on our website.
“We know these are difficult times and we’d urge any customer who is struggling to get in touch as there are ways we can help, including cold weather payments and targeted support such as through our E.On Next Energy Fund.
“We also work with agencies such as StepChange, Citizens Advice and Energy Advice Scotland and we have dedicated phone lines for customers at risk of being off supply or in other emergency situations.”
Some customers who pay by direct debit have seen their bills reduced as a result, as providers adjust payment plans to reflect the new policy.
Every household with a domestic energy supply will get a £400 energy bill discount.
If you use a prepayment meter, make sure your supplier has your up-to-date contact details so you can get the vouchers.
— CitizensAdvice (@CitizensAdvice) September 21, 2022
EDF Energy had previously increased the direct debits of some customers at the start of the month when bills were projected to rise to an average of around £3,500 before the Government intervened.
Customers of OVO Energy also complained that the supplier had asked them to raise their direct debit last month, only to lower them following Ms Truss’s announcement.
Citizens Advice advised customers who are confused about their direct debit increases to ask their supplier directly.
Ofgem previously urged providers to take “urgent action” after a review found “a range of weaknesses or failings in the way they charge customers’ direct debits”.
The results of the review, published in July, found five suppliers had “moderate or severe” weaknesses.
More than seven million households saw their direct debits increased between February and April, with 500,000 facing an increase of more than 100%.