Guide to Back Billing
Miscalculations when it comes to energy bills can happen. When your supplier sends you the wrong bill, back billing is the one way for them to get back the money your business owes. Back billing can be a big problem for businesses as these bills tend to be extremely high. From this guide, you can find out what back billing is, how it works, and how to avoid it. Here, you will also find information on what to do if you get a back-bill.
What is back billing?
Back billing is when, in the past, a company made a mistake in charging you for your energy consumption and it now has to claim the money. If that happens, the supplier will send you a back-bill to make you pay the outstanding amount. Back-bills include all miscalculated charges.
Back-bills usually happen unexpectedly and the sums on them can be huge. That is because the missing payments keep adding up over a certain period of time. On average, if a customer gets a back-bill, they have to pay over a thousand pounds. Companies can back-date a bill for up to 12 months.
Why does back billing happen?
There are several things that can cause back billing.
- Wrong meter ID number – sometimes the supplier might have the wrong ID number for your gas or electricity meter. That means that you might be paying for the amount of energy someone else uses. If their consumption is lower than yours, you might have to pay the company back through back billing.
- Estimated meter readings – if you don’t submit your meter readings regularly, your energy consumption will be estimated. If, as a result of that, you end up underpaying for your bills, back billing might happen at some point.
- Human mistakes – sometimes a small mistake done by someone working for the supplier can lead to charges piling up. That can include, for example, misspelling some information.
- Broken meters – if your electricity or gas meter is broken and you haven’t been paying the correct amount for your bills, back billing is likely to happen.
What to do if you receive a back-bill?
Many people are shocked when they receive high back-bill. Nevertheless, if that happens, you shouldn’t panic. You also shouldn’t immediately agree to pay it. Always call your supplier first so they can explain the situation. You should also ask them to double-check all the readings and numbers. If the bill turns out to be accurate, you can ask them about the payment methods. Often the supplier will let you pay it in instalments if you cannot afford to pay it all at once.
You should always check that all the information displayed on the back-bill is correct. That includes your name, meter ID number, and address. Sometimes the bill might actually be for someone else. Nevertheless, if you are the right recipient of the bill, you should check if the company does not back bill you for more than 12 months. Back billing is regulated by law, and energy suppliers can only back-date a bill for one year. They can, however, chase you for debt for up to 6 years.
How to avoid getting back billed?
If you follow these few tips you can make sure that you get accurate energy bills and avoid back billing.
- Take meter readings each month – make sure you regularly send meter readings to the supplier. It’s a good idea to write them down somewhere so you can keep track of your energy consumption. If you ever think you got charged too much or too little, you can verify that by checking the record of meter readings.
- Check your bills – you should always check that you’re paying for your actual consumption, not an estimated one. If you notice that at some point you are charged more or less than usual, you should contact your supplier to sort it out. Similarly, if some month you don’t receive your bill you should let the company know immediately.
- Submit the first and the last reading – if you are moving home or changing your business’s premises always submit the first reading when you move in, and the last one when you move out.
What to do if the supplier is breaking the back billing rules?
Ofgem introduced a number of rules relating to back-billing. The most important one is that the supplier can’t make you pay for unbilled energy that was used more than 12 months before the mistake was found. Moreover, back-billing rules must be included in companies’ terms and conditions.
If you think your energy provider has breached the back-billing rules there are a few ways to complain. You can find an overview of them in the table below.
|point of contact||how they can help|
|your energy supplier||you should always contact them firsteach supplier has a different complaints procedureif the supplier admits their mistake, they can reduce the back-bill charges|
|Citizens Advice||contact them if talking to your supplier doesn’t change anything thanks to Citizens Advice stricter back billing rules were introduced|
|the Energy Ombudsman||making a formal complaint to them is the final step the Energy Ombudsman investigates all back billing disputes and analyses individual circumstances|
When can you be back billed for more than 12 months?
The back billing rules introduced by Ofgem do not apply in some extreme cases. You can be charged a back-bill for a period longer than a year if:
- You have not been paying your bills on purpose
- You moved into new premises and never got a new energy contract
- You refused to let someone take a look at your meter
- You have been stealing gas or electricity.
Getting a back-bill for thousands of pounds can be overwhelming and many people immediately think it’s a scam. Nevertheless, back billing is a legitimate way for energy suppliers to claim money for any underpayments or miscalculations. There are many things that can cause back billing to occur, but luckily as the new smart meters are being installed around the UK, back billing cases should become less frequent. Thanks to the smart meters rollout suppliers will be receiving real-time meter readings, without the need for customers to submit them. This way, clients will be charged only for their actual energy consumption.