Martin Lewis has highlighted a persistent issue within the UK energy billing system, warning that energy companies frequently backbill consumers for periods exceeding 12 months, despite regulations prohibiting such practices. The money specialist told MPs at a public accounts committee hearing that he continues to hear from people affected by this problem.
Backbilling Rules and Consumer Protections
Ofgem, the UK energy regulator, has rules in place that protect domestic consumers and microbusinesses from paying for energy used more than 12 months ago, provided the supplier failed to bill them accurately or inform them of the amount owed. Specifically, the rules apply if the consumer has not received a statement of account, had a Direct Debit set too low, or not received an accurate bill for that period.
Despite these protections, Lewis stated: "I am still regularly contacted by people who have had two years of backbilling." He emphasized that billing in the energy market is "incredibly complex" and that many consumers are unaware of their rights.
Systemic Failures in Modern Billing
Lewis questioned why, in the modern digital age, such errors persist: "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." He noted that if a supplier fails to bill for two years due to their own fault, they cannot charge for more than 12 months, but people still get billed incorrectly.
Citizens Advice Guidance
Citizens Advice advises that suppliers "cannot usually send you a bill for energy you used more than 12 months ago." However, the backbilling rules do not apply if the supplier sent a bill within the year and the consumer did not pay. The organization recommends that consumers who receive such bills write to their supplier stating they are protected by the backbilling rules and should only be charged for one year's energy use. If the supplier persists, consumers should file a formal complaint.
