Negative Energy – Are Your Utility Bills Too High?

What you can do if you have been overcharged for energy or water

We've all been blindsided one time or another by a bill that's far in excess of what we expected, and often the worst offenders are those that come from energy companies. It's never an easy task to tell how much energy we've actually used, so even when faced with a seemingly extortionate bill, many people simply pick their jaw up off the floor and try to forget about how much they're paying out.

What a great deal of consumers don't realise is that the frequently-echoed initial reaction of "That can't be right!" is very often the case. It is estimated that, in 2008, energy providers overcharged customers a total of £1.6bn - meaning the average household is paying £74 more than they ought to be.

But how do the utility companies get away with cheating their customers to this extent - and how can you fight back?

With gas and electricity providers, overcharging is often a result of infrequent meter readings. They are under no legal obligation to read any customer's meter on a more regular basis than once every two years, so if you haven't seen a meter reader recently, it's likely that your bills are based on estimates of your energy usage rather than the reality. If in doubt, you can check your latest utility bill - an estimated sum will usually be denoted by an 'E' which appears after the supposed meter reading on your bill.

If you're paying based on estimated usage, you could spend a year reading by candlelight and eating only nuts and berries, and still be charged an extortionate sum by the energy suppliers. Usually they will calculate the amount you owe based on past bills and average usage, so if you have worked to make your home more energy-efficient recently, or moved into a new house, you could easily end up overpaying. Fortunately, there are steps you can take to rectify the problem if your utility company gets it very wrong.

First of all, you can take meter readings yourself, allowing to check whether the amount they have charged you for is anywhere close to the reality. Most energy companies will offer a chance to submit meter readings yourself or to challenge their estimates, so this route is one which is often worthwhile if you're frequently overcharged.

If you're worried about taking an accurate measurement or you're not sure how, get in touch with your energy company - they may be able to advise you on how to take a precise reading. You might also be able to request a visit from a meter reader from your utility company. Whether this service is offered and how soon they will be able to attend will depend on your individual power supplier.

Another thing that will depend on your individual power supplier is whether they've made use of the sneaky tactic of increasing tariffs without alerting the customer. While the technique has come under heavy criticism, many energy companies delay for as long as possible before alerting their customers to the fact that they are raising costs, meaning you could end up paying more than you originally agreed to for up to two months without having any way of knowing. It also denies you any chance of shopping around prior to the price hike to see if you could be getting a better deal elsewhere.

Because of this, if your bill seems excessive then it's always worth checking the tariff listed on there and comparing it to the one you originally signed up to.

While the previous tactics are useful if you fear you have been overcharged for gas or electricity, water usage is harder to monitor. The majority of people do not have metered water, so there is no immediate opportunity to take matters into your own hands and ensure that you are being billed fairly. Furthermore, if you are dissatisfied with the rate of billing, there is nothing you can do to switch your water to another supplier.

Despite - or perhaps due to - this inflexibility in the industry, water suppliers can be equally as problematic, if not more so, compared to other utility suppliers. Some have suffered reprimand in the past for charging the customers up to ten times more than their actual usage warranted. It's not unprecedented for people to receive refunds due to overpaying their water supplier, so if you're concerned that this may be the case, it's a worthwhile use of time to get in touch with your supplier.

If you believe your water company is overcharging you on a regular basis, a more long-term solution is to have a water meter fitted. This means that you'll be charged for the amount of water you actually use, rather than an estimate by the supplier.

Except in very rare circumstances involving structural issues, water companies are obligated to fit your water meter for free, and the regulatory body Ofwat estimates that the average customer saves 5-10% on their bill after having one installed. If you find yourself paying more after having a meter installed, you also have the right to switch back to unmetered billing within the first year, so it's worth trying a meter out if you think you are paying excessively for your water use.

Regardless of the problem with your billing, you will always need to get in touch with the utility company as your first step. All companies are required to have a standardised complaints procedure, so it should be no problem to look it up on their website or phone or write to request that they send you a copy.

When you register a complaint with them, be sure to include proof of your claims. These could take the form of bills, meter readings you've performed yourself, evidence of the tariffs you signed up under and anything else you feel may be relevant. Be sure to clearly state the nature of your grievance and that you expect a refund due to the overcharging.

If they reject your initial complaint, it is worth writing to them again, this time asking to have your case evaluated by someone higher up in the company. The response to your initial inquiry should have a reference number for your complaint attached, so be certain to include this when writing subsequent letters, as well as describing the steps you have already taken to remedy the issue.

In some unfortunate cases, the company may continually fail to address your complaint. If this is the case, or if you do not receive any response to your correspondence within eight weeks, then you should take your case to the appropriate regulatory body.

If you are dealing with your energy or gas supplier, then you need to contact the independent Energy Ombudsman (EO), who will take on your case free of charge and may even be able to secure compensation on your behalf if the energy supplier has mistreated you. Any issues regarding your water provider should be submitted to the Consumer Council for Water, a similar organisation for those involved in disputes with water or sewerage providers.

If this route should bring no joy, then it is worth getting in touch with your local Trading Standards Office or Citizens' Advice Bureau, who will offer free professional advice on what to do next and may even take on your case and handle it on your behalf.

Beyond this, there is always the possibility of going to the small claims court. Again, the Citizens' Advice Bureau can help you out for free here, as can the Community Legal Service.

Disputes with utility companies may seem daunting, but with the advice above, you're practically guaranteed a successful outcome.

Claims Financial