Martin Lewis has warned that energy companies in the UK continue to bill customers for energy used more than 12 months ago, despite regulations from Ofgem designed to protect consumers. The money expert says he regularly hears from people affected by this practice, which he believes should not be happening.
Backbilling Issue Highlighted at Parliamentary Hearing
Speaking at the latest hearing of the public accounts committee, Lewis described billing in the UK energy market as 'incredibly complex' and cautioned that many consumers are being caught out by suppliers when they are actually eligible for protection. He told MPs: 'We have a host of problems over billing. Billing is incredibly complex, especially in the energy world. We have the issue that you cannot be backbilled for more than 12 months. I think Ofgem has been cracking down on that, but I am still regularly contacted by people who have had two years of backbilling.'
Ofgem Rules on Backbilling
Ofgem's website states that its regulations mean both domestic energy consumers and microbusinesses do not have to pay for energy used more than 12 months ago if: your Direct Debit sum was earlier set too low to cover what you were required to pay; you haven't received an accurate bill for it beforehand; or you haven't been informed about what you needed to pay through a statement of account previously.
Despite these regulations, Lewis informed the hearing that people are still regularly told to settle outstanding amounts. He stated: 'If you do not know that you cannot be backbilled for over a year, you do not know that you can say, "I'm not paying for more than a year because it was your fault." There are technical rules - if you have behaved wrongly, it doesn't apply - but, effectively, if they have not billed you for two years and it is their fault, they cannot bill you for longer than 12 months. But people do still get billed. One would surely think that in this modern digital world something is systemically going wrong in the companies in the way that we do this.'
Citizens Advice Guidance on Backbilling
According to Citizens Advice, your supplier 'cannot usually send you a bill for energy you used more than 12 months ago'. Its website states: 'The back billing rules don't apply if the supplier sent you a bill before the year passed and you didn't pay. In this case, the supplier can still charge you.'
Citizens Advice recommends that people who are instructed to pay up in the manner Lewis describes should write to their energy supplier. The advice is: 'Tell them that you're protected by the back billing rules and should only be charged for 1 year's energy use.' The website states that if the company persists in attempting to charge you, you should lodge a complaint.
