Consumer Rights: How to get back the £2bn energy firms owe us

Big Six hoard overpaid monthly direct debit payments ... but there are ways to force a refund

The stakes are rising in the standoff between the energy companies and the Great British Public. Following an uncomfortable session in front of MPs on the Energy and Climate Change Select Committee bosses of the Big Six firms promised to pass savings on to customers if the Government cuts green levies. But they were accused by the boss of a small supplier of charging as much as they thought they could get away with.

While we wait for the MPs to decide whether, and by how much, customers are being ripped off, a report from Which? shows that the Big Six have been hoarding our money to boost their bank balances. Can it be fair that they hang on to £2bn that we've overpaid to them because they set our monthly direct debit payments too high?

I don't know about you but I recall being told by my gas and electricity suppliers that the most cost- effective way to pay was to agree a monthly amount taken out of my account by direct debit. There are usually discounts for this. The idea is that by paying the same amount each month you pay for more than you use over the summer but have the peace of mind of knowing you won't have to find extra in the winter to cover higher bills.

However it seems that collectively we've paid in £2bn more than we needed to and the suppliers have been hanging on to the money.

So do we have a right to a refund? The companies review direct debit accounts - usually once a year but in some cases more often. At a review they will look at whether the payments you've been making are sensible given how much gas or electricity you've used, and adjust monthly payments up or down at that stage. If you are in credit most companies have a figure over which they will give you an automatic refund. Some will refund a portion of the amount you have accumulated and use the rest to reduce your monthly payments. British Gas refunds automatically if a customer has a credit of more than £200 at the time of the annual review of their gas or electricity account. They say very few customers ever get an automatic refund because they check twice a year to make sure direct debits are set at the right level. Scottish Power automatically refunds if you have overpaid by three months' payments and it pays £1 for every £33 by which you are in credit over £100. If you are more than £5 in credit with E.On when it reviews your account you get your money back.

If you have overpaid by less than your supplier's threshold for an automatic refund you can ask for your money back. You'll need to give them an up-to-date meter reading and then they will calculate whether you're due a refund by their own rules. I have had a refund because I've been more than £150 in credit – but I've only received the amount over the £150. But very few of us ask for a refund and companies have different policies on how much they will refund and how much they will hold back to reduce your next year's payments.

Each company's terms and conditions for paying by direct debit are there somewhere in the small print. Several people have told me they've been refused a refund when they've asked but had their direct debits reduced. The Big Six supply about 98 per cent of the UK's energy but there are smaller companies to which you might want to switch in protest.

Energy Minister Greg Barker wants companies to give us our money back or pay interest on it when we are in credit. But if they are forced to give us back that £2bn you can bet that, like the banks, they will look for other ways to get our money to replenish the kitty. Getting our cash back now could cost us in the long run.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Barn owls are among species that could be affected
charity appeal
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy as ECB finally wield the axe
Arts and Entertainment
a clockwork orange, stanley kubrick
news... you won't believe how bad their skills were
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Sheridan Maine: Commercial Finance Manager

    Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Sheridan Maine: Regulatory Reporting Accountant

    Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Ashdown Group: Marketing Services Manager - (communications, testing, DM)

    £32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

    Guru Careers: Finance Account Manager

    £Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

    Day In a Page

    Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Could cannabis oil reverse the effects of cancer?

    Could cannabis oil reverse effects of cancer?

    As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
    The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

    The Interview movie review

    You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
    Serial mania has propelled podcasts into the cultural mainstream

    How podcasts became mainstream

    People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
    Jesus Christ has become an unlikely pin-up for hipster marketing companies

    Jesus Christ has become an unlikely pin-up

    Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
    Rosetta space mission voted most important scientific breakthrough of 2014

    A memorable year for science – if not for mice

    The most important scientific breakthroughs of 2014
    Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

    Christmas cocktails to make you merry

    Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
    5 best activity trackers

    Fitness technology: 5 best activity trackers

    Up the ante in your regimen and change the habits of a lifetime with this wearable tech
    Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

    Paul Scholes column

    It's a little-known fact, but I have played one of the seven dwarves
    Fifa's travelling circus once again steals limelight from real stars

    Fifa's travelling circus once again steals limelight from real stars

    Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
    Frank Warren column: 2014 – boxing is back and winning new fans

    Frank Warren: Boxing is back and winning new fans

    2014 proves it's now one of sport's biggest hitters again
    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
    Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

    The Boy in the Dress: On set with the stars

    Walliams' story about a boy who goes to school in a dress will be shown this Christmas