Banned Back Billing and Debt Help

This BBC podcast is supported by ads outside the UK. You just realised your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. Stop struggling to get your job posts seen on other job sites. With Indeed Sponsored Jobs, your post jumps to the top of the page for your relevant candidates, so you can reach the people you want faster.

According to Indeed data, sponsored jobs posted directly on Indeed have 45% more applications than non-sponsored jobs. Don't wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at indeed.com slash P O D K A T Z 13. Just go to indeed.com slash P O D. At the BBC, we go further so you see clearer.

With a subscription to BBC.com, you get unlimited articles and videos, hundreds of ad-free podcasts and the BBC News Channel streaming live 24-7. From less than a dollar a week for your first year... Read, watch and listen to trusted, independent journalism and storytelling. It all starts with a subscription to BBC.com. Find out more at bbc.com slash unlimited. BBC Sounds. Music, radio, podcasts.

Hello, welcome to this Moneybox podcast. State pensions rise from the 7th of April, but hundreds of thousands of pensioners will have to wait until May the 30th to get a full four weeks at the new rate. We explain how to get it sooner. new scheme to make problem debt more affordable for people struggling to pay off loans that seem never-ending. But first, the energy regulator Ofgem has been given less than two weeks to get answers to Parliament on back-billing.

We've reported before that's when people are sent new bills for gas and electricity they used more than 12 months beforehand, a practice that was banned seven years ago. The demand came after an interview we did last week with Bill Esterson, the Labour MP. who chairs the Energy Security Committee. A couple of days later, he wrote to the chief executive of Ofgem, highlighting Moneybox's investigation into backbilling, saying we found evidence of significant wrongdoing by energy suppliers.

Even the energy industry body Energy UK admits our investigation may have uncovered something systemic. going wrong. More from them later. But first, that letter to Ofgem, telling it to get answers. Reporter Peter Ruddock, who's with Moneybox this week, has been reading it. Peter, tell us more about what it says.

Got a copy of it here, actually. It's on headed paper, very official looking, with the House of Commons portcullis symbol at the top. Now, in the letter, Bill Esterson talks about our investigation over the last few weeks. He talks about that evidence of significant wrongdoing.

And he tells Ofgem he wants the regulator to make the abuse of backbilling rules a priority. He wants Ofgem to get information from suppliers about how often they're breaking the rules and he wants to ensure customers are protected from, quote, the aggressive...

pursuit of these backbills. Yeah, for a Commons Committee chair, that sounds like quite a strong letter. Absolutely. Look, the tone is very clear. Mr Esterson even says he has, quote, very strong feelings about this. And he talks about damages for customers who...

We've already been forced to pay these bills, which, remember, should never have been sent out in the first place. Jennifer and Melissa are two customers who were hit with back bills for thousands of pounds that totally broke the rules, and they gave Moneybox their reaction to this letter. Melissa.

is up first. I think it's positive that changes have to be made but I think it was necessary given the volume of people this is happening to and given the fact they are breaching legislation to take money that they shouldn't be. That is a serious concern and I'm pleased that the MP is taking it so seriously and moving this forward. I think it will be interesting as well to see what they're going to do about returning the money they should never have taken.

I think it's a serious letter and I think it's about time. I think the energy companies are so big, they've been doing this since probably backbilling rules were brought in. and they have continued to break them and break them and now they're being asked to provide details of how often they've broken the rules they're not going to do that and how how often have they broken the rules how do people know I just wonder if it goes far enough and whether it'll push them far enough.

The energy suppliers have told us if customers do receive back bills, they should contact their supplier to get them sorted out, suggesting it's a fairly simple process. But Peter, how was that for Jennifer and Melissa? Not great. Paul. They both told us they actually had a horrendous time after contacting their suppliers. I continuously contacted my supplier and was met with, you need to pay the bill, we're going to take the direct debit within seven days.

i kept canceling the direct debit because there's no way i could afford two thousand pounds in one go and then they kept then hounding me again and then telling me that it was going to affect my credit rating. They'd added it to my credit file. It made me really anxious about how I was going to pay the bill. I started to pay some of the money back and I just kept thinking. How am I going to pay this bill? It was just really frustrating and just it was quite upsetting to be fair.

So I received the four and a half thousand pound bill in September 2024. The complaints process took me over four months to get to a resolution. They put numerous barriers in place over that four months to stop me complaining. I went past the eight-week deadline.

And again, another barrier was put in place to try and stop me complaining and asking what I didn't understand. Once I got to a senior manager, after I persisted for over four months, they did finally acknowledge that there was a problem and I should have never been back billed. whole process was extremely long and extremely stressful.

Well, those are clearly dreadful experiences, but some listeners have said to us, Peter, that these bills may be old, the rules may say they can't be enforced, but why shouldn't people pay for energy they use, even if it was a long time ago? Yes, it's a fair question.

The 12-month cut-off was originally a voluntary agreement suppliers signed up to, and the regulator Ofgem banned the practice outright in 2018 because energy firms were still sending people very old bills, so old they could neither check nor inmate. many cases pay. But there is another problem. Many of these back bills also appear to be wrong.

As we just heard, bills for thousands of pounds, that's far more than could have been used. And energy firms do have a problem with accurate billing. So Citizens Advice got 60,000 complaints about energy bills last year alone. Wow. Now, back to that strongly worded letter to Ofgem from the Energy Committee Chair. How has the regulator responded to it? Ofgem would not come on Moneybox to talk about this issue, but in a statement it said it is reviewing billing practices and I quote...

looking closely at supplier compliance with the rules. Now, Mr Esterson and the MPs on the Energy Committee will be able to put questions direct to the Chief Executive of Ofgem when he's due before the committee in the next few weeks. OK, thanks, Peter. And of course...

we'll let you know what happens at that meeting. Energy UK, which represents the energy industry, did agree to do an interview, and earlier I spoke to its chief executive, Dara Veers. I played her the clips from Melissa and Jennifer and asked for her reaction. Look, you know, I obviously haven't heard the full details, but what I did hear in those clips is really, just sounds really horrible. It's a lot to go through. Everybody has busy lives.

to have to battle with a big company and feel like you're not being heard is, of course, really bad. And I'm glad they got put right eventually, but they shouldn't have had to go through that. But why are your members still breaking these seven-year-old off-gem rules on backbilling? The bank billing rule was bought in because this was an issue. Over the years, there's been lots of different approaches to bills and catch-up bills as meterings improved.

we as an industry have improved in this space. If you look at the off-gem figures, the systems advice figures, the ombudsman figures, things are actually improving overall across the industry on this. But I do think, you know, where you've got these cases where things do go horribly wrong, suppliers have to take it seriously. We are still really feeling as a country, I think, so many customers.

are still really feeling that long shadow of the energy crisis bills are still much higher than they were three or four years ago And we know that the price cap is set to go up again. Debt and money owed to the industry is at £3.9 billion now. It's at a record high. So we're talking also about bigger sums of money.

Yeah, but this isn't anything to do with the energy crisis, is it? This is your members getting the rules wrong. They're simple rules. You can't bill the energy used more than 12 months ago for the first time. Why are they getting them wrong? I don't understand how it even happened. I think there are multiple systems in use right now. Tens of millions of bills go out every single month.

Things do go wrong sometimes. And when they do go wrong, the party really needs to be on the supplier being given a chance to try and put it right as soon as they can. And you're absolutely right. You know, when things go wrong, it is so.

frustrating and worrying for customers. So they do need to like quickly to put it right. But where does the error occur? I mean, humans don't send out these bills. They're sent out by computers. It's simple enough to program a system. If a bill is more than 12 months old.

You don't send it. Why are the systems so poor? Sometimes I can't go into it because every supplier has a different system. And sometimes it is down to human error. More often than not, is it system error? There are many, many different accounts. different metering systems, different ways of doing this. There's not one uniform way that this is done across the industry, but there is a uniform license condition and a rule that oversees it. And as you say, you know, there are processes in place.

that suppliers have to adhere to and try and put things right. And when they do go wrong, they should be put right. Well, of course they should. But I mean, the rule you can express in 20 words, was the energy used more than 12 months ago? Is this the first bill for it?

if both are yes then don't send the bill why is that so difficult to get into the systems i know there's lots of different companies lots of different systems but this rule has been around for seven years and you seem to be saying it's Understandable that computers haven't yet been programmed to take it into account. I think there probably are some underlying causes to it. I think on the whole, billing errors are reducing across the industry.

I think over the last couple of weeks and what your programme's uncovered is that there may be some systemic issues that we aren't aware of, that the numbers that are collected industry-wide aren't showing. So I know that the regulator of Gem...

is getting involved asking more questions obviously the select committee are now looking at this i think it's right where you're highlighting there are concerns we need to look into it and we need to really understand where the issues are occurring how and why and how to stop them Okay, let's come on to what happens when things do go wrong then. At that point, people do talk to a human. They ring up and complain. Somebody answers.

And they are getting it wrong, aren't they? The Energy Committee Chair again said that there's evidence of wrongdoing and he wants these threats to stop. And we heard... about the threats from those two ladies, you know, that it would affect your credit rating. They were hounding her. They wanted thousands of pounds within seven days. That's being said by a human. Why doesn't that person know?

What this simple rule is. Look, you know, when debt, you're talking about debt letters as part of a process. When those letters go out.

It's really important for us to acknowledge that debt is a big issue across this industry. And when debt isn't paid and when bills aren't paid for, that does end up... being paid for across everyone's bill because a lot of money does get written off and that's not to say that that money was owed because as you say the back billing rule does exist it is incumbent on the businesses to try and

claim back the money that is owed to them. Where they're getting it wrong, obviously that's the problem. Of course it is, but this money isn't owed. If somebody complains about a bill, surely the first question is, was it used more than 12 months ago?

Is this the first bill? And then they just say, we're really sorry, we'll cancel the bill. They don't do that. They threaten people with credit ratings, with bailiffs, make people afraid. They want the money paid within seven days. Why aren't those people? So you could put this. on a post-it note on everyone's computer screen, though they got it right.

Catch-up bills and back bills are complicated. Everyone's metering is different for their home. I'm sorry, it's not difficult. Was the energy used more than 12 months ago? Yes. Is this the first bill? Yes. I'm sorry. I'll cancel the bill. It is that simple. I think the point there that you made about is it the first bill is the crucial point there and you do have to look back into the account and check whether the supplier did make every effort to contact the customer.

and before the bill that you're discussing. Because the rule is simple and, you know, to explain it to a computer or indeed to a human is straightforward, some people suspect they're just doing this deliberately, that they're trying to take money they're not owed. Are they?

Energy suppliers have been doing an awful lot over the last three years during times of record prices, doing what they can to put extra support and advice and help in place for customers. They're investing in their teams, they're growing their teams, they're improving their systems. Sometimes things do go wrong and it is really important they put them right when they do go wrong. Well, of course it is. But my question was, are they doing this deliberately to take money that isn't owed to them?

They wouldn't be doing it deliberately. Honestly, there are so many different systems in play here. It's not an excuse. We do need to get it right. But this wouldn't be done deliberately. Dara Veers, Chief Executive of Energy UK. And if you get a bill that seems wrong or is a new bill for energy used more than 12 months ago, complain to your supplier and if refused, go to the Energy Ombudsman. And I have to say, emails are pouring in about that bill.

some dreadful stories of very large, very old bills and very heavy-handed enforcement. If you're worried about a debt to an energy supplier that does have to be paid, and as we heard, there's £3.9 billion owed by customers, that's the topic for Money Bots Live on Wednesday afternoon. Ruth Alexander's here on Radio 4 at 3pm discussing what help you can get with big energy debts. Send her your experiences and questions to moneybox at bbc.co.uk or send a voice note on WhatsApp 030678.

You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. Stop struggling to get your job posts seen on other job sites. With Indeed Sponsored Jobs, your post jumps to the top of the page for your relevant candidates, so you can reach the people you want faster.

according to indeed data sponsored jobs posted directly on indeed have 45 more applications than non-sponsored jobs don't wait any longer speed up your hiring right now with indeed And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at indeed.com slash P O D K A T Z 13. Just go to indeed.com slash P O D. At the BBC, we go further so you see clearer.

With a subscription to bbc.com, you get unlimited articles and videos, hundreds of ad-free podcasts and the BBC News Channel streaming live 24-7. From less than a dollar a week for your first year, read, watch and listen to trusted, independent journalism and storytelling. Find out more at

State pensions paid to more than 12 million people will rise in April by up to 4.1%, though the extras like SERPs and deferring your pension will only rise by 1.7%. The change begins on Monday 7th April. But the Department for Work and Pensions has confirmed to me that some people will not get the rise in full until the end of May. But they can take action now to get it sooner. Ima Devlin's here. Ima, how much more will pensioners be getting? from April.

Well, the standard amounts of the old and new state pensions will rise by 4.1%. That's an increase of £6.95 a week in the old pension and £9.05 a week in the new pension for more recent years. retired people. Pensions rise by the famous triple lock by wages prices or 2.5% whichever is the highest. This year the increase is pegged to the 4.1% rise in wages and as you said

other bits will go up by less. But most people won't see that higher pension on that first Monday in April when it begins, will they? No, so most pensioners are paid every four weeks in arrears. That means if someone is paid in the first week after the 7th of April, the money will be from the past four weeks. So they'll get the old rate and will have to wait four weeks to get that. That's a nearly two-month wait.

can they do to get it earlier? Pensioners can choose to be paid weekly instead of four weekly. They will still see... They will still be paid in arrears, but only one week behind, not four weeks. So they will get the increase a lot sooner. They can ask for that change by contacting the pension service via post or on the phone.

Their number is 0800 731 0469. Thanks, Ima. And I should add that some much older pensioners are paid weekly in advance and they'll be the first to get a payment at the higher rate.

Now, people who get into debt often find that debt just grows because of the high rates of interest they're paying. A new scheme, though, by credit unions is trying to solve that by giving an affordable loan to people in debt at a lower rate of interest.

They can pay the interest and reduce the debt too. The scheme is aimed at people who have several different expensive debts from overdrafts, credit cards, catalogue debt, even payday loans. They can all be consolidated into one single loan repaid over a loan. longer period with a lower payment. The pilot project is being run by one of Britain's largest credit unions called My Community Bank and Fair For All Finance, a not-for-profit organisation which campaigns to make financial products fair.

They've invested around £9 million in a fund which has the potential to help around 15,000 people with high-cost debt. People like Joseph, who got a consolidation loan from his local credit union after taking on debt. that he couldn't repay. creep up a couple of little deaths here and there just so i could get the newest latest thing and then slowly over time and as things progressed through life it got a little bit

bigger, I guess, so then the debt started racking up. It started off with just a small little £250 overdraft.

the 250 pound overdraft was back when i was 18 and from that with various different um credit cards loans and such it racked up to 15 to 20 000 pounds to be honest with you ahead you get a couple of letters the letters they send out can be quite fierce they don't look great reality is if you phone up these companies they can be helpful they can give you the support but it's quite difficult to reach out

Joseph was given a consolidation loan by Boom Community Bank for more than £9,000 to be repaid over five years at a lower rate of interest, which cut his monthly payments from £1,250 a month to just... I feel a lot freer. I think the main thing is I was hiding away from any call that would come through. I didn't know who it would be.

I was hiding away from any calls no callers and there's that worry that you might get a letter through the post someone else is going to open it see it whatever it may be a friend will phone me up for a coffee

And I would have to make up an excuse. I'm really sorry, I can't do it because of this, that or the other. Poor excuses. You lose friendships through it. For me, I can phone my friends up and say, are you free on the weekend? Do you want to meet up? Go to the park, have a coffee. I've got a daughter. I'll grab a coffee, get her a little coffee, a little baby, you know, things that I just couldn't do it before. And the biggest thing for me is being able to put my phone on the side.

and just it doesn't matter who phones me up i can answer it without having that thought of is it going to be someone trying to collect a debt you know you got that little bit of money you're coming up towards the end of the month and you can still afford to put fuel in the car it's just amazing

Listening to that is Kate Pender. She's Chief Executive of Fair For All Finance. Kate Pender, this loan has made a huge difference to Joe there. He was able to get a cheaper loan repayable over a longer period. How do you do that? Great question, Paul. So consolidation loan is basically taking multiple debts and putting it into a single loan. Usually that loan is offered at a lower interest rate with lower payment amounts per month.

And it's simpler for the borrower because they've only got one company to pay. Unfortunately, at the moment, these loans are often not available to people like Joe, people whose credit file might not be perfect. And so at Fair for All Finance. We're working with lenders, including credit unions, community banks, to provide guarantees that help those lenders reach more people in need for whom these loans are a good solution.

And how do you assess the risk to the lender offering these loans to people who, after all, have got into debt they really can't manage? So for lenders, this is... something that's really important to consider. And crucially, what they will really focus on is once these debts are consolidated, is the affordability for that person significantly improved? And if it is,

that person is likely to be a good payer. But what we know from the debt advice sector is that that behaviour for the borrower is really dependent. on someone making sure that they don't get into more debt. So I think the way that step change, the debt advice charity set it out on their website is really helpful. They've got a debt consolidation calculator that helps.

people consider, is this really the right solution for me? And if it's not, helps them think through what some of the debt products might be instead, like a debt relief order or a debt management plan. Yes, but it really requires the person to stop being, if you like, an irresponsible borrower and becoming a responsible borrower. And you've got to guarantee that really, haven't you, for this to work? I think so.

there's probably two cohorts of people that we're talking about here. There are some people for whom problem debt has arisen because they've been tempted to buy things that they probably couldn't afford. And that's the root cause of some of their problems. But for lots of people, the problem debt that they end up with is really...

through no fault of their own. You know, we've got case studies of an NHS nurse, a guy called Craig. His car broke down and he needed to spend a thousand pounds repairing that car. He simply didn't have that thousand pounds. He went to his local credit union. And they basically, to your point, looked at his credit file, which wasn't very healthy, looked at his affordability per month and realized that he couldn't afford to pay an additional thousand pounds.

in debt servicing every month. But they could also see that he was paying off a high cost loan where he'd taken out £500 when the washing machine blew up. And what they were able to do was combine the thousand pounds he needed for the car, the 500 pounds that he already had in high cost credit and turn that into. a consolidation loan of 1500 pounds. The risk profile for them was supported by a bad debt guarantee from us.

And Fair For All Finance is really committed to providing more of these guarantees to help lenders work with people like Craig and with people like Joe, who are really ready to make a change in their life. and who need some help to get through a particular bump in the road that has kind of come at them from left field.

Yes, you mentioned debt relief orders and they actually wipe out debt. I suppose for some people they're a better alternative, but they leave a stain on your credit record, don't they, briefly? They do. And that stain can last for six years. The fact that you've had one can really impinge on your ability to transact in your daily life and get any other access to credit. Kate Pender of Fair For All Finance, thanks very much.

Well, consolidating and increasing your knowledge about personal finance is what we're here to do, not just low cost, but free of charge. And you can also listen to the programme live every Saturday at noon on BBC Radio 4, also free of charge. of course. And it's free to email us too with your ideas, stories, problems and useful tips. Moneybox at bbc.co.uk You can also send a voice note or a comment to Moneybox on WhatsApp.

We do read and listen to them all and you might get on the show. In this podcast, the team was Peter Ruddick, Dan Whitworth, Ema Devlin and Joe Krasner. Studio manager, George Willis. Our editor is Jess Quayle. I'm Paul Lewis and this was a BBC News money and work production for BBC Sounds. And now, youth is not always wasted on the young. I'm Nicola Coughlin and for BBC Radio 4.

This is history's youngest heroes. Rebellion, risk and the radical power of youth. She thought, right, I'll just do it. She thought about others rather than herself. 12 stories of extraordinary young people from across history. There's a real sense of urgency in them. That resistance has to be mounted, it has to be mounted now. Subscribe to History's Youngest Heroes on BBC Sounds.

At the BBC, we go further so you see clearer. With a subscription to bbc.com, you get unlimited articles and videos, hundreds of ad-free podcasts and the BBC News Channel streaming live 24-7. From less than a dollar a week for your first year, read, watch and listen to trusted, independent journalism and storytelling. Find out more at...