Watch out for back-billing
A banned practice by energy suppliers is still going on, says Paul Lewis.
Electricity and gas suppliers are not allowed to charge for energy used more than 12 months ago if that is the first time they have billed for it. But there is growing evidence that many still do. The chief executive of their trade body, Energy UK, has admitted to me there may be something systemic going wrong. Two inquiries (one by the regulator, the other by Parliament’s Energy Security Select Committee) have been launched.
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The ban on what is called back-billing was introduced seven years ago after firms were found to be sending out bills for energy used many years previously, despite a code of practice that said they should not. The average bill sent then was £1,160 – which, naturally, many people found hard to pay. So from 1 May 2018 the regulator Ofgem imposed an absolute ban on them sending a new bill for energy used more than 12 months before.
But back-billing is still going on. Last year Citizens Advice received 60,000 complaints about electricity and gas bills – many of them about back-billing. And in the 12 months to September the Energy Ombudsman received more than 3,300 complaints about back-bill[1]ing, coming from customers of all five of the biggest energy suppliers.
Nowadays the back-bills being sent are even larger than they were in 2017, and in many cases there is evidence that they are simply wrong. There are numerous examples of them being sent after fitting a smart meter or a change of address.
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If you get a bill for the first time for energy used more than 12 months ago, you do not have to pay it. It is important to contact your supplier to avoid legal action being taken, though. In many cases they threaten to send debt collectors or damage your credit record. Remind them that back-billing is banned under standard condition 21BA of their licence and say you want the bill cancelled. If they refuse to do that, take your complaint to the Energy Ombudsman (energyombudsman.org).
The only exception to this rule is if the firm had already billed for that energy within 12 months of it being used, or if your behaviour was “obstructive or manifestly unreasonable”. Assuming you weren’t, you won’t have to pay it!