Direct debit not fit for purpose - my bad!

OK, I made a mistake.

In my previous post (https://community.bulb.co.uk/t/direct-debit-not-fit-for-purpose/89689) I drew some faulty conclusions.

So here, I want to put those mistakes right, explain why I got confused and, I hope, offer some suggestions to help Bulb and its customers.

For the first 8 months of my contract, Bulb failed to take any direct debits from me. They emailed me to say the money would be withdrawn, but it never was. That resulted in my initial payment, and my £50 joining bonus being eroded month after month until my account was in debit.

When I contacted Bulb about the problem, they eventually discovered the direct debit had been set to ‘manual’ not ‘automatic’, so payments had never been transferred from my bank. To acknowledge their mistake, Bulb offered me a good will gesture of £10 which I accepted. This £10 credit nudged my account back into credit. At this point I thought all was rectified: I had a positive balance and my direct debit was sorted.

I was therefore surprised to find the next month my account was in the red again. I looked at my September direct debit and found it had not gone into my account before September’s bill. I queried the delay. Bulb told me it was caused by the bank holiday and I could move my payment date earlier. I checked this forum and found other people had moved their payment date but the billing date had been moved too, so money still didn’t get into their account before billing date. When October’s direct debit was ‘pending’ for five days and my account again went into debit, I contacted a second customer service agent who said he would refer the problem to his superior. It seemed like Bulb were deliberately holding back my direct debit until after my bill was sent.

It was only when I read Lou_at-Bulb’s response in this post: https://community.bulb.co.uk/t/is-it-me-or-is-this-more-than-coincidence/88329/12?u=drelectron that I realised my error - I’d focussed on the direct debit and forgotten the bigger picture - the direct debit was being held back because it’s supposed to go in after the bill; I pay a month in advance - the direct debit is for next month’s payment.

I actually said as much in my own post: “the only way to avoid falling into debit is to have over a month’s estimated payment in the account at all times” (Yes!) but in the mess over my credit being eaten away I’d forgotten that’s exactly what I’d signed up for.

So, I apologise if I misled anyone. And thanks to Allanr’s responses which encouraged me to continue my fact checking.

Suggestions

I do have some, I hope helpful, suggestions as a result of my experience.

  1. I’m not the only one to get confused over the cycle of payments and debits. Neither of the help team who fielded my complaints picked up my error - maybe emphasis needs to placed on checking why a customer’s account is in debit.
  2. When my account went into debit, Bulb responded by at first suggesting, and then insisting, that my payments increase. This again missed the cause of the problem. In my case, a far better response would have been something like: "Because you pay in advance, your account needs to have a positive balance at the start of each month of a to cover the coming month’s fuel. To keep your payments at their current level, please make a one-off payment of b to give your account the positive balance it needs to start the month. If you are unable to make this one-off payment, we will need to raise your payments to c for d months to cover this shortfall.
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I’m pleased to hear my responses to your initial thread spurred you on to check further.

Personally I don’t agree that in every month over a 12 month period you need to have a positive balance at the start of the month. This works all in Bulb’s favour and not in that of the customer.

To give my reasoning. I moved from Bulb at the start of this year as I found another supplier who was cheaper than Bulb, during my time with Bulb all my dealings with them were positive.

When I joined the new supplier in January my DD payments was set at 1/12 of my estimated annual costs (based on the annual usage in kWh I supplied to them at the time). This meant initially my account was in credit as you pay one month in advance as per Bulb. When I received my first bill from my new supplier my account went into debit for a couple of days until my DD was paid into the account. From February until July this year my account was always in debit, But from July my account has started to go into credit each month which I anticipate will be the case until January 2021 after which it will go into a debit situation.

During this period of time my DD was increased by £3 per month by my supplier.

On this basis my new supplier as was the case with the suppliers I was with before joining Bulb adopted a swing and roundabout approach to DD in that they tried to retain a constant DD by accepting that some months you would be in credit and other months in debit. Overall over a 12 month period the DD payments would cover the annnual cost of energy.

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Absolutely, when a company suggests equal payments over the year, it should accept that the credit it enjoys from customers joining in the spring will be balanced by the debt accrued from customers joining in the autumn.

I’m pleased the company you’ve joined has that enlightened approach. I have now joined another energy company and hope they adopt the same position.

Funnily enough, the clincher for me to move was not Bulb’s pricing or their service, but learning that with Bulb I’m not eligible for the broad category of the Warm Home Discount. It seems energy companies can set their own criteria for the broad (not core) category; my new supplier’s terms are different so I am able to apply.

They can set their own criteria within a basic formula, and tweak it to suit, some are more generous than others

Hello @DrElectron,

Thank you for your wonderfully written and detailed post, it was quite the read.

We are sorry for the stressful journey you have been on with the payments at Bulb.

As you have explained in your post the payment cycle can be quite confusing and it would be great to explain it in a clearer way to our members. I will be passing this on to the team to look into different ways we can communicate this.

We really like your suggestion for the payments increase explanation, would you mind if we used something similar in the future?

You may also find this article interesting : https://help.bulb.co.uk/hc/en-us/articles/115003405632-How-Bulb-charges-for-energy-usage

Hi Mel

Thank you for your kind words. I’m glad you found my posts useful.

Yes, you are very welcome to use my suggestion for the payment increase either verbatim or as a basis for your own text.

I’ve had a look at https://help.bulb.co.uk/hc/en-us/articles/115003405632-How-Bulb-charges-for-energy-usage but I find it confused and problematic.

It predicts usage will change:

“For roughly half the year, your monthly payments will be more than your monthly usage. This means you’ll build up credit in the warmer months, which you’ll use up during the winter, when your energy usage typically goes up.”

But if a customer joins in Autumn or Winter, equal monthly payments over the year means monthly usage is likely to be more than their payment for some months. Yet this is presented as an anomaly resulting from a poor estimate:

“Your account can go into debit if you use more energy than we’d estimated, meaning you’ll owe money for energy you’ve used.”

And the inevitable debit that people who join in winter will incur is presented as a problem that needs action:

“If this happens, you can change your monthly payment amount in your Bulb account - we’ll suggest a payment amount to get you back on track. You can also make a one time top-up payment to get your account back in credit.”

One is left with the impression that Bulb is happy for customers to be in credit but not debit, even though equal payments over the year will inevitably mean those customers who join in autumn / winter will be in debit for several months.

If the above impression is not Bulb’s position, I’d definitely suggest rewriting that article. It might help to first describe a normal year’s payments in which both credit and debit are acceptable, then, having establishing the norm, look at what financial problems might occur and how Bulb will deal with them.

Of course, if bulb is averse to customers starting in debit, another approach would be to set monthly payments for people who join in autumn /winter higher, because they haven’t built up a credit cushion; then lower their payments during summer. Just a thought.

Incidentally, I’m a writer by profession, so if I can be of professional help, do let me know! :slight_smile: