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Home›Direct debit›Martin Lewis issues warning over direct debit energy bills

Martin Lewis issues warning over direct debit energy bills

By Meaghan H. Gonzales
July 18, 2022
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Martin Lewis has issued a warning that many households with direct debit energy bills could be abused by energy companies.

Speaking on ITV’s This Morning, money-saving expert Martin Lewis reported that energy regulator Ofgem has ordered energy companies to improve the way they set direct debits. He explained that while direct debits will have increased following the increase in the energy price cap, 8% of people have seen their energy bill with direct debits more than double since April.

“One of the biggest questions we get in this niche is that people are very upset and angry that their direct debit energy bills have been increased by way more than the price cap. In some cases more than double,’ Martin told presenters Alison Hammond and Dermot O’Leary.

Martin Lewis in white shirt and blue jacket

(Image credit: Getty/HGL/Contributor)

Martin Lewis has been working on a campaign to address the issue. Five minutes before continuing This Morning, he said he had received a response from Ofgem on what was to come.

“So they found that about 8% of people, 500,000 people, saw direct debits more than double and they looked at whether that was right or wrong under those circumstances,” Martin says.

The Ofgem report found evidence that some energy suppliers’ processes are “not as robust as they could be”, leading to “inconsistent, incorrect or poor treatment of customers”.

Which energy companies are affected?

The report investigated 17 major vendors. He announced that there would be enforcement action for TruEnergy, which was identified as having major issues. Four other suppliers, including Ecotricity, Good Energy, Green Energy UK and Utilita Energy, had “moderate or severe” weakness.

Larger companies such as Bulb, E.on, Octopus Energy, Outfox the Market, Ovo, Shell and Utility Warehouse were all found to have “minor weaknesses”.

British Gas, EDF, Scottish Power and So Energy were found to have “no significant issues”.

bedroom with light pink wall, gold wall shelves and a plant in a vase

(Image credit: Future PLC/Lizzie Orme)

How to tell if you’re paying too much on your energy bills by direct debit

Martin Lewis explained that for many people, direct debit energy bills will have increased following the price cap increase of 54% in April. However, energy companies are going to be asked to review every direct debit that has increased by more than 100%. So if you’re trying to save on your energy bills and wondering why your electric bill is so high, it’s worth taking note.

“If this has happened to you, the company should review it to see if it was appropriate or not,” says Martin Lewis.

“Now there are reasons why it could have doubled, if you had chosen a very cheap solution and set the ceiling price; if you switched to a fixed rate which was more expensive or if you are in debt, these are reasons why it could have increased by 100% or more.

“But there are a lot of people who don’t fall into any of those categories who have seen it increase by more than double, and I’ve been involved in the campaign to try to improve that.”

kitchen room with wooden floors and kitchen cabinets

(Image credit: Future PLC/Colin Poole)

If you think your direct debit is incorrect, Martin points out that you have every right to dispute it. The best thing to do is to take an up-to-date meter reading which you can then submit to your supplier and ask them to justify the increase. If they can’t, you can ask for it to be lowered. If the supplier refuses, you must file a formal complaint with the energy ombudsman.

Experts, including Martin Lewis, predict a further increase in the energy price cap of 65% in October. So if you’re doing something that you’re overpaying by direct debit, act now.

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