Broadcaster and TV show host Victoria Coren Mitchell has taken to X (formerly Twitter) to threaten legal action against Ovo Energy, accusing the company of “wrongfully” taking thousands of pounds from her bank account.
If only I could say that this was an unusual or isolated story. Unfortunately, it’s a complaint I hear almost every week when consumers contact me in desperation, desperately trying to get their money back.
It is unclear whether Ovo has mistakenly accepted a one-off direct debit payment from Victoria’s account, or whether the direct debit payments have been greater than her energy consumption over a period of time, leaving her with a large credit. on your energy bill.
It is clear from Victoria’s social media posts that, at the very least, she has suffered distress and inconvenience.
Either way, Victoria is entitled to her money back and potentially compensation.
This is why:
Payment made in error
When you set up and agree to pay a supplier by direct debit, you are protected by what is known as a ‘Direct Debit Guarantee’.
This provides consumers with various protections, including the right to an immediate refund when a payment is made in error or fraudulently.
The guarantee also states that where the billing company (here Ovo) does not provide an immediate refund, the bank that set up the direct debit (here Bank of Victoria) must step in and provide a refund and of course then request the refund from the company, as is the case with a section 75 claim.
Credits
Many consumers now pay their bills by direct debit for convenience and also because most companies offer discounts for this payment method.
The amount you pay for energy by direct debit is ‘smoothed’ over a year, meaning you typically pay the same amount each month, although your energy usage will fluctuate due to seasonality.
When an energy supplier sets the direct debit amount, it must take all reasonable steps to base the amount on current and accurate information about the customer’s current consumption and tariff, as well as other factors, including credit balances.
In this regard, the regulator (Ofgem) says it expects providers to regularly assess their customers’ direct debit amounts to ensure they are accurate and appropriate. Suppliers can also increase direct debits to take into account upcoming price cap increases.
It is not uncommon for consumers to accumulate a credit on their energy account, as their consumption may never reach the amount actually charged by direct debit and sometimes the difference (the credit) can be significant.
If this is what has happened to Victoria, she has the right to demand the credit back and Ovo will have to honor this request, unless she has a good reason not to.
Unlike the payment made in error scenario, you will not normally be able to make a claim to your bank under the Direct Debit Guarantee here.
The reason is that your energy supplier has the right to increase your direct debit, provided they give you at least three days’ notice.
Retroactive billing principle
Although it is not as common now, I still hear from consumers whose energy supplier has charged their account a lump sum during a previous period that had not been previously billed.
Under Ofgem rules, energy suppliers cannot charge you for energy usage from more than 12 months ago, if the supplier themselves are at fault for not billing the household correctly. This is known as the late billing principle.
Compensation
When you suffer distress, inconvenience and/or financial loss as a result of misconduct or a breach of contract, you will often have a potential claim for compensation.
It is clear from Victoria’s social media posts that, at a minimum, she has suffered distress and inconvenience, and may have additionally incurred banking costs, thereby also incurring financial losses.
In my opinion, Victoria should request payment of compensation, in addition to the full refund of the amount taken in error, or the credit, as the case may be.
Complaining more
If Victoria has a claim against your bank under the Direct Debit Guarantee and it refuses to accept that claim, you can make a complaint to the Financial Ombudsman Service.
In all other scenarios, your next step if Ovo does not reimburse you or pay you compensation is to lodge a complaint with the Energy Ombudsman.
This is as long as at least eight weeks have passed since you first submitted the complaint to Ovo. The Ombudsman will have the power to order Ovo to refund the money in question, apologize to Victoria and pay her compensation.
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