Buyer Beware - Level Pay

Naux

Just moved from ESB to Bord Gais on level pay, ebilling, DD etc to avail of the discounts.

Got a letter from BG stating that they had set my level pay amount based on

"your most recent consumption, your previous years consumption and energy prices(divided by twelve). An initial tolerance(typically 20%) is added for variations in your usage"

This means that they calculate what you used last year and add 20% and that's what they bill you under level pay!!!!!!!!!!! Classic. They will give you cheaper electricity(-10% on unit charge I think) but charge you more initially (+20% on last years total bill for tolerance for variations on usage.) In effect you are paying more that last year while most likely building up a healthy credit on your account. All is not lost: You will get the extra money back from them as follows.

Clause 6

"Payments will change upon a significant change in the customers annual consumption"

Interestingly they do not define "significant change" but I assume they will revise the level pay amount if there is a "significant change" in your annualised usage. I have to assume that a significant change would have to be more than the 20% tolerance that they build into their initial level pay figures

Clause 7

"at the end of the first year and annually thereafter any balance of over or under payment will normally be allocated to the next years monthly payments except if the amount is adjudged by Bord Gais to be excessive."

If you have overpaid at the end of the first year (you will have if your consumption is consistent year on year) this will simply be spread out across the following year by Bord Gais unless the amount is adjudged to be "excessive".


In summary I was livid when I got the level pay letter and did the sums and read the small print. Paying 20% more initially for my electricity!!!! Very good way for them to cashflow their business!!

I rang BG and complained and on the first call the customer service person did not seem to understand why I was so annoyed. She suggested that I read the meter and give her the reading and she could adjust the level pay amount if there was some error. She was missing the point(+20% tolerance) but I agreed to do that. After thinking about it I rang back and I was going to cancel the account. The second time I rang the guy immediately asked me if I knew my last years usage and said that he would set the level pay amount at that figure. I agreed to this. In my opinion they should not add the 20% tolerance in the first place.

In summary, Do not let them charge you the +20% tolerance on the level pay. Challenge them on it.

slimjimmc

It's good that Bord Gais gave you some leeway but why did you sign up if you didn't agree to their Terms and Conditions?
Surely if you had read them first this would haven't been such a surprise
http://www.bordgaisenergy.ie/levelpay/

Geuze

You pay for what you use, no more or no less.

If you use more than the level pay amount * 12, then at end of year you owe that, and they add it to next year's bills.

If you use less, then they reduce it from next year's bills.

Padraig Mor

Geuze wrote: »

You pay for what you use, no more or no less.

If you use more than the level pay amount * 12, then at end of year you owe that, and they add it to next year's bills.

If you use less, then they reduce it from next year's bills.

Given that they add on 20%, it's unlikely they'll owe you. For most people, it's simply giving BG an interest free loan. The fact that they keep spamming people about it too - I'm sick to death of them ringing me at this stage - surely suggests its in their own interests to charge this way.

sawdoubters

http://www.bonkers.ie/compare-gas-electricity-prices/

ytpe2r5bxkn0c1

Padraig Mor wrote: »

Given that they add on 20%, it's unlikely they'll owe you..

Other way round surely?

Naux

slimjimmc wrote: »

It's good that Bord Gais gave you some leeway but why did you sign up if you didn't agree to their Terms and Conditions?
Surely if you had read them first this would haven't been such a surprise
http://www.bordgaisenergy.ie/levelpay/

Very true, I should have read the fine print.

However I would not expect a company of their stature to act/operate in such a manner. I could see why they would add a tolerance of maybe 5% but in my opinion +20% is indefensible. How many people would expect to increase their consumption by 20% in a year? It does not stack up. It is purely a grab for cash up front in my opinion.

Naux

Geuze wrote: »

You pay for what you use, no more or no less.

If you use more than the level pay amount * 12, then at end of year you owe that, and they add it to next year's bills.

If you use less, then they reduce it from next year's bills.

You are completely missing the point.

You are paying more money to them up front, that is the point. More Cashflow up front for them, less cashflow for your household in the short term. You need to understand cashflow to understand my point.


They are putting most people who sign up for level pay in an overpayment position immediately(by adding 20%) thereby taking more cash from them up front. Sure they will reduce your bills next year by your overpayment. Therefore in effect you are starting to pay for next years electricity now!!

Would you do that with any other bill?

jimmycrackcorm

I've just moved from them and discovered they owe me a credit, so effectively I've been overcharged

foggy_lad

jimmycrackcorm wrote: »

I've just moved from them and discovered they owe me a credit, so effectively I've been overcharged

And they will have had the benefit of interest on your money for as long as they had it!

Level-pay is something to be avoided by anyone who wants to save money and keep their bills under control.

brightspark

foggy_lad wrote: »

And they will have had the benefit of interest on your money for as long as they had it!

Level-pay is something to be avoided by anyone who wants to save money and keep their bills under control.

Just how much I trees will you get on €200 saved over a year.

The €200 overpayment was initially deterring me from using it, but then I realised it might as well sit in a Bord Gais account instead of my AIB account where it wasn't earning any interest anyway. It also qualified me for a discount.

The did initially try to set me up on a much higher monthly rate, but I objected and they reduced it to what I had been paying the ESB .

bennyob

I signed up for this in September and calculated my previous 12 months usage myself. From memory, they only added approx 5% to my usage. Guess "typically" is just the company covering themselves, similar to and 'up to'.

Just checked my online account. I am currently in credit of €12.78. Not to bad so far but credit may get a bit bigger over the summer months.

wmpdd3

Make sure you are submitting readings if your meter wasn't read, this is what seems to cause trouble as you can't compare 2 periods of time properly.

efbeef

I opened a level pay, DD, paperless bord gais account when I moved into my new rental acommodation. Also nearly had a heart attack when I seen my DD amount! It was based on the previous tenants usage which was apparently 115 euro a month for a 2 bed apartment which has central heating!! I rang them and got it instantly reduced to 75 euro a month and they have agreed to reduce it again next month if required as my account is already 63 euro in credit! Ya just have to keep onto them I think!! :-)

sandin

foggy_lad wrote: »

And they will have had the benefit of interest on your money for as long as they had it!

Level-pay is something to be avoided by anyone who wants to save money and keep their bills under control.

interest rate at 0.5%

Lets guess that they have €50 (based on a bill of €250)

Interest earned = 25c

nope - I can't see 25c or 2c per month being the reason for this.

Geuze

Naux wrote: »

You are completely missing the point.

You are paying more money to them up front, that is the point. More Cashflow up front for them, less cashflow for your household in the short term. You need to understand cashflow to understand my point.


They are putting most people who sign up for level pay in an overpayment position immediately(by adding 20%) thereby taking more cash from them up front. Sure they will reduce your bills next year by your overpayment. Therefore in effect you are starting to pay for next years electricity now!!

Would you do that with any other bill?

Fair enough.

I suppose it means that less customers will be caught short at end of year.

But yes, their cashflow is up, and customer's is down.

Naux

sandin wrote: »

interest rate at 0.5%

Lets guess that they have €50 (based on a bill of €250)

Interest earned = 25c

nope - I can't see 25c or 2c per month being the reason for this.

Silly example/analysis for a number of reasons but mainly:

Do you think any business(except maybe a bust bank:eek:) can get a working capital loan at 0.5% !!!!!

They will be taking this money from thousands of customers.

bennyob

bennyob wrote: »

I signed up for this in September and calculated my previous 12 months usage myself. From memory, they only added approx 5% to my usage. Guess "typically" is just the company covering themselves, similar to and 'up to'.

Just checked my online account. I am currently in credit of €12.78. Not to bad so far but credit may get a bit bigger over the summer months.

I just received my latest bill. I'm now in debit of €5.86. This cover the christmas period so consumption would have been up. It's suiting me down to the ground right now.

Fred Swanson

This post has been deleted.

ytpe2r5bxkn0c1

It's not really designed for people with even consumption. It's designed for people with consumption that varies by season, so the payemts can stay even over the year. If you have even consumption you might as well just pay the recorded meter reading each time.

Generally they work out quite accurately with most suppliers once they get a grasp of your particular trends.

MOH

When they first started doing it they rang me (about 10am on a Saturday morning) to offer it to me. I turned it down because, as others have pointed out, I'd effectively be giving them an advance payment, in return for zero benefit.
I made it quite clear to them I wasn't interested, next bill came, they'd put me on it anyway. Switched away from them a month later.

Naux

Louis Round Sundae wrote: »

It's not really designed for people with even consumption. It's designed for people with consumption that varies by season, so the payemts can stay even over the year. If you have even consumption you might as well just pay the recorded meter reading each time.

Generally they work out quite accurately with most suppliers once they get a grasp of your particular trends.

If they wanted to get a "grasp of your particular trends" then I would suggest that they should not add 20% to your previous 12 months usage to start off with.........

Most people are moving across to avail of a discount in the first place! I think they have more than one motive with the whole level pay system.

Femme_Fatale

If you use more than the level pay amount, then you have to pay for it. What's the issue? There's no extra charge here.

wmpdd3

OK well, if you have a €39 mobile contract and the next year they charge you (39+20%) €46.80 per month level pay and if you dont use it all we'll give it back to your. (about €100 extra over the year)

If you use too much, we'll bill you at the end of the year.

It must suit some people but it is def not a 'sign up and forget about it job'.

ytpe2r5bxkn0c1

I know many people!e who have used such payment plans for decades - right back to the ESB Budget Billing Plan. They all loved it. Personally I just like to pay by DD as bills arise, but they felt paying an even amount all year instead of high winter low summer fluctuations suited them. In fairness the balance at the end of a year was next too nothing, it seems. I asked some recently and they are still happy. Of course at the end of the summer period there is a credit but the winter bills eat it up.
This outrage about a porported 20% added to the usage is a bit overdone here. That would be pared back very quickly when they get a pattern - they cannot access the pattern under another supplier - and would settle down very quickly. But look, it's either for you or not. Payment options like this helps many people to budget and that's great. If you don't like it then don't go for it but warning people off with the Buyer Beware clarion cry is a bit OTT

Naux

Louis Round Sundae wrote: »

This outrage about a porported 20% added to the usage is a bit overdone here. That would be pared back very quickly when they get a pattern - they cannot access the pattern under another supplier - and would settle down very quickly. But look, it's either for you or not. Payment options like this helps many people to budget and that's great. If you don't like it then don't go for it but warning people off with the Buyer Beware clarion cry is a bit OTT

What difference does the pattern under another supplier make?? Purportedly the whole point of the level pay is to "level out" your payments over a 12 month period thereby making the pattern irrelevant.

They know your total usage from the previous twelve months and they add 20% to it to set their level pay. I just cannot see how this helps anyone budget:eek:

The "clarion call" as you put it does not warn people off it just makes them aware that the level pay is not necessarily in their best interests.

Normally I would not bother with harping on about things like this but I think people/households are trying to scrape through these days and moving electricity providers to avail of a discount should not lead to them having to pay out 20% more money out of their pockets for the first twelve months. I know they will get it back eventually but most people/households cannot spare the money right now. I think the +20% is indefensible.

thomas anderson.

I ended up being in €140 in credit after 3 months. This was after reducing it down from €95 to €75 a month.

Ended up cancelling it because I couldnt pay my refuse charges because the money was gone.

Going to use up the credit and leave board gais, they are horrible horrible company

beauf

My dislike of these kinda systems is they can lead to a bill shock when they re-adjust them and find its been under estimated over a long time.

thomas anderson.

I keep track of my meter readings so I always know where I'm at.

The winter gas bill was high though.

Why are women always cold?

NickD

I am having a nightmare with Bord Gais, I was paying 161 per month level pay, I thought it was pretty high, it went up from 124 per month but with 3 kids I figured we were using a lot and it suited me to pay it monthly. I moved house two months ago and they took another month after we cancelled our account. Then they issued the final bill for 411 euro. There is no way we used this emount of electricity as we were living in a three bedroom bungalow.

Have complained repeatedly and been told that I have to pay it, end of story. I really can't afford it, and besides that I fail to see how we could possibly run up such a bill

schemingbohemia

NickD wrote: »

I am having a nightmare with Bord Gais, I was paying 161 per month level pay, I thought it was pretty high, it went up from 124 per month but with 3 kids I figured we were using a lot and it suited me to pay it monthly. I moved house two months ago and they took another month after we cancelled our account. Then they issued the final bill for 411 euro. There is no way we used this emount of electricity as we were living in a three bedroom bungalow.

Have complained repeatedly and been told that I have to pay it, end of story. I really can't afford it, and besides that I fail to see how we could possibly run up such a bill

Did you check your meter?