Is it right that consumers paying for their energy use with cash or cheque should be penalised with higher bills?

Earlier this year, energy watchdog Ofgem promised that customers would no longer be discriminated against because they didn’t pay their bills by direct debit.

In fact, it brought in a new licensing system that it hoped would reduce any price differences.

However, the BBC has found that five of the Big Six providers (British Gas, Scottish and Southern, Scottish Power, npower and Eon) have no current plans to drop their prices for customers paying by cash or cheque.

EDF is considering price changes.

There is some concern that older people – many of whom are on low incomes – are being particularly badly hit by this discrepancy as many do not use direct debits.

What do you think? Is it fair that people paying by cash or cheque pay more? Do you think they cost more for energy companies to process? Or maybe you think this is another instance of energy firms squeezing consumers unnecessarily. Bring me your comments!

For once I'm on the side of the Energy companies here.

Paying by cash and cheque involves extra administration costs. Direct Debits cost nothing for the customer to set up. Everyone must have a bank account these days to be paid, collect pension etc. So, what is the excuse for paying by cash or cheque? Preference?

On the other hand, that should leave no excuse for the companies to provide rebates in cheque form. If they charge us extra to pay by cheque, then they should be charged extra to rebate by cheque

There is some concern that older people – many of whom are on low incomes – are being particularly badly hit by this discrepancy as many do not use direct debits.

Older people who are on a pension should be on a are eligible for a social tariff and then they would have the equivalent off the cheapest on-line rates regardless of payment methord or internet access. So it should effect the older vunerable customers.

Felicity King-Evans:

Is it right that consumers paying for their energy use with cash or cheque should be penalised with higher bills?

Penalised - no, pay more if it costs more to process - yes.

Actually, people struggling to pay are better on fixed monthly direct debit because it evens out heavily seasonal energy bills. Basic Bank Accounts ensure nobody is deprived of the option of using fixed monthly direct debit.

Of course billing has to be accurate which is something else but is easily achieved by submitting regular customer readings. Everybody on this forum is computer savvy enough to use (and save) on an online tariff and submit regular meter readings online.

Jalexa:

Felicity King-Evans:

Is it right that consumers paying for their energy use with cash or cheque should be penalised with higher bills?

Penalised - no, pay more if it costs more to process - yes.

Actually, people struggling to pay are better on fixed monthly direct debit because it evens out heavily seasonal energy bills. Basic Bank Accounts ensure nobody is deprived of the option of using fixed monthly direct debit.

Of course billing has to be accurate which is something else but is easily achieved by submitting regular customer readings. Everybody on this forum is computer savvy enough to use (and save) on an online tariff and submit regular meter readings online.

Couldn't agree more - no-one is precluded from setting up a direct debit (you don't even need a computer as you can do it over the telephone with most companies) so those that still choose to pay by cash or cheque should be charged a fee to cover additional processing charges. Look at it from the other side - is it right that those people who choose to set up a DD absorb the administation charges caused by those that don't? You can't even use age as an excuse as my grandmother is 90 and she pays her gas and electricity via DD!

Take heed of the bit in bold though. I've lived in my house for almost two years now and only once have the Electricity company got the meter reading correct (despite the meter being accessible from outside my property) :-D

Hmmm... I wonder if we are all being a bit blase about other people's web skills (skillz?) because we are all obviously comfortable online.

I'm not convinced that everyone I know would be happy managing their bills via the web.

Also, I know a few people who would not want a direct debit because they are not always confident the cash will be in their account. Obviously anyone in that situation is pretty cash-limited, so it is not great that they will be hit with higher bills.

Having said that, I know that the way I pay uses minimal admin etc, so I expect a discount for doing so.

In conclusion... I don't know!

Felicity King-Evans:

Hmmm... I wonder if we are all being a bit blase about other people's web skills (skillz?) because we are all obviously comfortable online.

But as I pointed out, if it's only the internet "skillz" are holding you back, then pick up the phone and set up the DD that way!

Felicity King-Evans:

Also, I know a few people who would not want a direct debit because they are not always confident the cash will be in their account. Obviously anyone in that situation is pretty cash-limited, so it is not great that they will be hit with higher bills.

That's a valid point but isn't that something the government were wanting to address when they told the utility companies that people on pay as you go tariffs (keys etc) should get the same pricing as metered customers?

As far as I see it, it's less so a penalisation for paying by cash / cheque / pre-paid meter / whatever - more so a reward for paying on-line / by DD.

Might seem unfair but, as someone more famous than me once said "You can't please all of the people all of the time".