Simon Read: What to do if you're hit by a surprise energy bill demanding thousands of pounds
So what should you do if you receive a scary letter from your energy company demanding thousands of pounds? The most important thing is to know your rights.
You are obliged to pay for any energy you have used, but energy suppliers must follow certain rules about how far back they can bill you. This is called the Back Billing Code and it was put in place in 2007.
In short, firms are not allowed to charge you for energy used more than 12 months ago if “the supplier was at fault for not having sent a bill to the customer”. But the time limit only applies if you have made efforts to contact your supplier or provide them with correct meter readings.
If you haven’t been billed for your gas or electricity for a while, you should contact your energy supplier to find out what’s going on. If you do so and request a bill and nothing arrives, then your supplier cannot then charge you for energy used more than a year ago.
However, if you have not made any efforts to contact your supplier or did not co-operate with their requests for meter readings then you will be liable to pay the whole debt. Even then, you cannot be charged for more than six years’ worth of back-billed energy charges (even if the supplier is not at fault).
The 12 month time limit may also apply if your supplier billed you using estimated meter readings instead of valid readings provided by you or a meter reader. It also comes into play if your energy company has mixed up meter readings and not acted on information available to put things right.
If you have raised a query about your bills or meter readings and your supplier doesn’t do anything about it, but instead allows a large debt to build up on your account, the 12 month rule may also apply.
Citizens Advice says that if you have been trying to contact your supplier for more than a year, you should also point out that you think you are protected by the code of practice on back billing and should only be charged for a year of usage. If your supplier tries to bill you for longer than this and you have made reasonable efforts to contact them, you can make a complaint.
If you can’t pay, suppliers should offer you a payment plan that allows you to repay any debt over the same length of time that it has built up. For example, if you have not had a bill from your supplier for three years, you should be able to spread the repayments over three years.
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