MoneySavingExpert founder Martin Lewis slammed energy firms taking advantage of ambiguity around an Ofgem rule preventing them from egregiously back billing customers
Martin Lewis has slammed “negligent” energy companies leaving Brits with mounting back bills while calling for Parliament to support billing reforms.
The MoneySavingExpert founder and chair has warned that UK firms are unfairly leaving Brits with higher bills thanks to faulty meters, leaving only people aware of a key rule able to dispute charges. He appeared before the Energy Security and Net Zero Committee in the House of Commons this afternoon to answer questions on back billing. Also known as a “catch-up bill”, energy firms use the measure to bill customers for energy that wasn’t previously accounted for, usually because of gaps in meter readings.
The practice is policed by the Office of Gas and Electricity Markets (Ofgem), which places restrictions on the amount of time for which they can bill. But Mr Lewis has criticised ambiguity around the rules allowing “negligent” companies to charge people more than is permitted.
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Speaking to the committee this afternoon, he said the “principles” of backbilling are clear, as they state companies may not back bill more than 12 months “as long as there hasn’t been an unreasonable obstacle”. Mr Lewis added, however, that Ofgem “doesn’t describe when the backbilling exemption is valid”.
When asked whether energy companies are “deliberately using the kind of ambiguity” of which he was speaking, he said this was likely being done, but negligently. He said: “I would say negligently rather than deliberately, probably. I don’t think there is a chief executive who has sat there and said ‘lets get every backbilling penny we can’.”
He added: “I think there is just a lack of care in how this works and a lack of being really strict and saying ‘you can’t back bill’.” Mr Lewis warned that fewer people understand the back billing rules, as customers can complain if they believe they have been issued a bill in error.
Ofgem states that people are exempt from back bills covering the last 12 months if:
- They have not had an accurate bill for their energy used during the period, even though they asked for one
- They have not been informed about any charges due via a statement of account before
- Their Direct Debit amount was previously set too low to cover any charges due
When asked whether he would support the period being scaled back to six months from 12, Mr Lewis said electricity firms have no good reason in the modern age to take more than six months to issue a correct bill. He said: “We live in a modern digital age where we’re trying to have smartmeters installed that give an instant reading of what is going on in your energy systems.
“Why should a firm take over six months to give you the correct bill? I can’t see any reason for that. And so I absolutely would support reducing it to six months.” Mr Lewis added that he would support companies including in any letters informing customers of a back bill a passage “in prominent print” outlining the back billing rule.
He concluded: “If they believe that its a fair back billing over the six month period they should be quoting prominently the rule so you know your rights if you want to argue that.”