All energy firms will be banned from back-billing customers beyond 12 months under stricter new rules.
Energy regulator Ofgem has announced that from the end of April, no firm will be able to bill customers for energy they used more than 12 months ago.
Six firms, including British Gas, E.on and EDF, already agree not bill customers beyond 12 months as part of a voluntary scheme, but Ofgem says these companies don’t always follow these rules and so it is putting in place a ban on it that will apply to the whole sector.
Back-billing usually happens when suppliers estimate bills as they don’t have regular, accurate meter readings. Once they have the meter readings they may then send a catch-up bill if the estimated bill was too low.
The regulator says the typical backbill is £1,160 but in extreme cases it has seen customers suddenly asked to pay more than £10,000.
Get Our Free Money Tips Email!
What are the new rules?
No firm will be able to bill you for energy used more than 12 months ago.
British Gas (including Scottish Gas), E.O.N., EDF Energy, Npower, Scottish Power and SSE already agree to do this as part of Ofgem’s Voluntary Code of Practice for Accurate Bills.
The only exception will be if a customer has prevented an energy company from taking accurate meter readings, for example by refusing to allow it to take a reading.
What does Ofgem say?
Rob Salter-Church, Ofgem’s interim senior partner for consumers and competition, said: “Large catch-up bills can leave consumers struggling financially or even in debt to their supplier.
“Getting billing right is an essential part of customer service, and its unfair that consumers should be left out of pocket when through no fault of their own theyre issued with a shock bill from their supplier.
“So were taking action and banning suppliers from issuing backbills beyond 12 months, where its not the customers fault. This sends a strong message to suppliers to improve the accuracy of the bills they send to their customers.”