Scottish Power announced today that it will compensate customers who overpay for gas and electricity through excessive monthly direct debits.
From June, Scottish Power customers who are more than £100 in credit will receive £1 in ‘interest’ for every £33 they have ‘loaned’ the energy company by paying direct debits that have been set too high.
The move comes after a Which? Money survey on gas and electricity suppliers revealed that customers’ money is effectively being used as ‘interest-free loans’ by suppliers who take unnecessarily high direct debit payments each month.
For advice on claiming back excess credit, see our guide to dealing with energy suppliers.
Martyn Hocking, editor of Which? magazine, said: ‘Now that Scottish Power has announced that it plans to compensate customers that are in this position, we hope to see the rest of the “big six” play fair with customers and follow this lead. It’s easy to switch supplier, so unhappy customers who feel they’re being overcharged could vote with their feet.’
See the Which? guide to cutting energy costs for ways to save on gas and electricity. Which? Switch can help find the best value tariffs. Nine out of 10 members who had switched energy suppliers in the last 12 months said that it was easy to switch, and customers who have never switched before can save around £250 a year.
Scottish Power is the first major energy supplier to compensate customers who build up excess credit through direct debit payments. The refund is equivalent to paying annual interest of 3%.
Ofgem, the energy regulator, has followed Which? in calling for improvements in the way that energy suppliers deal with direct debit payments from customers.
Paying for what you use is also at the centre of a move by the Environment Agency today. The watchdog has called for water meters to be installed in virtually every home.
The body believes water use needs to be reduced to prevent future shortages.
Water meters don’t mean lower bills for every type of customer. To see if switching to a water meter could save you money, see our guide to water meters.
Which? is campaigning for the energy regulator Ofgem, along with the government and suppliers to ensure that there’s simpler billing for energy – so you can keep a check on energy use and make sure that you’re getting the best deal. We want to hear your views and experiences of energy bill frustrations. Visit to find out more.