On BBC Radio 5Live’s Ask Martin podcast this afternoon, the money saving expert was giving viewers insight on what to do when they are “in credit” but their energy firms are hiking their direct debit, and if this is fair. He said: “It is fair if the hike is roughly in proportion to the increase in rate that you are paying.
“If you were on the price cap before, you would have just seen a 12 percent hike in what you pay.
“It is perfectly legitimate for that company to get in touch and say they’re increasing your direct debit – say 12 percent because that’s how much more you’re going to be using to pay for the electricity.”
He explained that this direct debit hike is only unfair in disproportionate situations.
For example, those people in credit who are with varied providers that increased their energy by 20 percent, the energy providers should not increase a person’s direct debit by 50 or 60 percent.
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“That is not proportionate, that is not fair,” Mr Lewis said.
Under the Energy Licence Terms each person has a right to a fair direct debit.
The money saving expert said he has “grave concerns” that those energy suppliers who are disproportionately increasing people’s direct debits are doing so to “artificially raise their cash flow” and “bring in more money.”
Martin suggested Britons should speak to their providers if they feel their direct debit hike is unfair. He said: “Always do a meter reading first so that any information is based on an accurate meter reading and give it a couple of days to process through.
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“I would get in touch with them and say, ‘Can you justify why you have hiked my bills, or direct debit by 60 percent when the rate you’re charging me is only going up, let’s say 12 percent.’
“’That doesn’t seem proportionate to me.’
“If there is no justification then tell them ‘I will not pay that much, and this is the amount I think is fair to pay’ and try and agree it with them.
“If that doesn’t work, make a formal complaint and go to the energy ombudsman.”
“There are no meaningfully cheaper switches available right now.
“The cheapest fixed deal is 35 percent (around £450/year more for someone on typical bills), and my best guess is that gap makes it too big a premium to make it worth moving right now.”
The energy price cap is the maximum amount suppliers can charge customers on variable tariffs and it is reviewed by market regulator Ofgem twice a year, in both April and October.
This year, an increase in wholesale energy costs as global demand recovers means the new cap is £139 higher than the previous.
The money saving expert also said he would be “gobsmacked” if this number did not rise another 30 percent in April.
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