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Energy Back Billing Explained

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Last updated: 29 March 2021

Energy suppliers are among the worst for inaccurately billing their customers. The Big Six energy companies have paid a collective £53 million to Ofgem for mis-billing or bad billing. This means back billing is unfortunately quite common and it can create a lot of financial pressure when you least expect it. Our guide explains how back billing works and what to do if you receive a back bill from your supplier.

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What is back billing?

Energy back billing happens when your energy supplier doesn’t bill your energy use correctly the first time round. For example, if you use more gas or electricity than expected, you might receive a back bill to pay the difference.

Back billing is quite common, even with the best energy deals you could end up with an expensive back bill. However energy suppliers have to abide by strict rules to avoid putting you under unnecessary financial pressure. 

What are the rules for energy back billing?

Back billing need not be a cause for concern. Thanks to rules put in place by Ofgem, you may not have to pay the full amount and if the billing mistake was made over a year ago then you may not need to pay at all.

In fact, suppliers cannot bill you for domestic energy charges from more than 12 months ago, as long as the supplier is at fault. If you are lucky, this means you may not need to pay your back bill at all. If you do need to pay your back bill, most energy suppliers will be quite willing to help you set up a payment plan for what you owe. 

Whilst Ofgem regulations make it clear you cannot be charged for mistakes made by your energy supplier over a year ago, some companies continue to send bills to their former and current customers. Make sure you don’t get caught out!

What is the back billing principle?

The back billing principle means that your energy supplier cannot seek payment for their mistake if it occurred over 12 months ago. The back billing principle applies to your bill if:

  • You requested bills from your supplier but they failed to bill you at all.
  • Your supplier used estimated readings to bill you, instead of valid readings provided by yourself or a meter reader. 
  • Your meter readings were mixed up leading to incorrect billing. 
  • You raised a query or fault about your account which your supplier failed to do anything about, leading to a debt on your account.

However, back billing will not apply to your bill if you did not contact your supplier to arrange payment, you wilfully avoided payment or failed to cooperate with attempts to obtain meter readings. 

Why have I received a back bill?

Reading your energy bill and finding huge costs can be alarming, but there are a number of reasons why your supplier could make a mistake with your bill. 

Many households rely on estimated meter readings instead of taking regular readings for their supplier. This makes it very easy for you to pay the wrong amount. If this is left unnoticed for several months you may receive a back bill. 

A billing error will usually be a one-off mistake. For example, if you need to change your direct debit but it’s accidentally cancelled going unnoticed for several months, then your supplier will likely send you a back bill for all these months in one go. 

You might also receive a back bill because your supplier has made a mistake with their meter information. A surprising number of households are being charged under the wrong meter number! This means you could receive a back bill for usage from another property. 

How to Deal with Back Billing

If you have been incorrectly back billed by your energy company it’s important that you contact your supplier as soon as possible. You should follow their complaints-handling procedure in the first instance. 

If this fails to reconcile your issue then you should contact Citizens Advice. If you still have no luck reviewing your case, you will need to take it to the Energy Ombudsman. 

If you have been correctly back billed then unfortunately you will need to pay it. However, this shouldn’t put you under unnecessary financial strain. If you are worried about paying your back bill, contact your supplier as they may be able to arrange an affordable payment plan for you. 

If you are unhappy with your energy provider, it’s almost always worth switching. You can easily run an energy comparison to see which deals might suit you.

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Fergus Cole

Author: Fergus Cole

Fergus is a journalist specialising in the personal finance, energy and broadband sectors. He also has a passion for travel and adventure so tries to make the most of this in any spare time he gets.

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