Energy back billing refers to bills sent to clarify mistakes. Energy suppliers will send a back bill in you have been incorrectly charged for the energy you use.
There are rules put in place by Ofgem to regulate back billing. Despite the introduction of smart meters, mistakes in billing remain common. The Big 6 energy providers have paid tens of millions compensation over the last few years.
We explain how to manage back bills and your consumer rights.
What is back billing?
A back bill is a correction invoice from an energy retailer to correct a mistake. If you have been overcharged for electricity or gas, you may subsequently receive a back bill. This letter will inform you of credit that will be added to your account.
Many customers receive estimated bills. Back bills are used to correct mistakes in consumption inaccuracies. Overpaying for the energy you use can be costly, especially if it is unexpected.
I have received a back bill I can’t afford to pay
If you receive a legitimate back bill, contact your energy supplier. You can ask for an affordable repayment plan. If you cannot reach an agreement with your energy supplier, you can contact Citizens Advice for support.
You will receive a back bill if you have been incorrectly charged. That could be because you received an estimated invoice originally. Sometimes there can be a problem with your meter, or your energy supplier may have been billing you for the wrong meter.
Sometimes if your energy provider has been unable to accept payment, you will get a back bill. For example, if you have changed your bank account, voiding your direct debit payments.
How to dispute an energy bill
Sometimes a billing error may occur. There are several reasons why your energy supplier may have made this error. Households without a smart meter rely on estimated billing. If meter readings have not been submitted, your supplier may estimate your energy bill.
Another common reason for billing errors is poor internal processes. This could mean that you have been underpaying your energy bill for sometime without anyone realising.
If you suspect a billing error you should contant your energy supplier immediately. You should clearly explain the problem and what you want them to do about it.
Initially if you require any support, you should contact Citizens Advice. If you cannot seem to get the issue solved, you can escalate it to the Ombudsman Serivces Energy. You can only escalate the issue if it has not been solved after 8 weeks. You can escalate the issue earlier if you reach a deadlock and they say they cannot do anything more.
The rules on back billing
There are rules that energy providers have to abide by with back billing. These rules are for micro-businesses and domestic customers.
You should not be charged for electricity or gas used more than a year ago. If your energy provider has made a mistake in billing you, they have twelve months to inform you. That is assuming that you have not avoided paying a legitimate bill. For example, you are not permitted to block your electricity or gas meter. Illegally taking electricity is also, obviously, not allowed. Energy providers need to state this in their terms and conditions.
If you do receive a bill over a year old, you should contact your supplier. You can quote from Ofgem’s rules, published on their website.
If they insist on payment, you can make a complaint to the Energy Ombudsman.