Don’t get stung by backdated energy bills

If your energy supplier has tried to claim backdated payments from you, you’ll know how much of a shock it is to have your bills suddenly inflated. But why do suppliers backdate payments? And what are your rights? We explain it all here.

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Why do energy companies backdate payments?

Energy companies backdate payments to get back any money they are owed by customers who have been underpaying for their energy. This is usually a problem for households who have estimated energy bills, whereby suppliers best-guess your usage and charge you accordingly, and those who pay by Direct Debit.

If, for instance, you pay a set amount of £80 each month, but your energy usage actually works out at £100 each month, then your energy supplier will be out of pocket by £20 a month, or £240 a year - in which case they’ll eventually come looking for the money they’re owed.

This can come as a nasty surprise to customers, who can suddenly see their monthly payments hiked up for no apparent reason. A recent example of this was when Shell Energy tried to backdate a customer’s underpayments over the last five years, which saw their Direct Debit payments increase from £72 a month to £130 a month, even though the account had been £148 in credit.

Thankfully for the customer, Ofgem regulations saw the Shell Energy customer’s Direct Debit amended and account refunded. But what are your rights if this happens to you?

How long can an energy company backdate payments?

Energy firms can only backdate energy bills for a maximum of 12 months, thanks to regulations introduced by Ofgem in 2019. This was to ensure that customers weren’t put in financial difficulty by energy payments they thought were up to date.

Back bills are usually applied to accounts where suppliers need to estimate usage as they haven't received regular meter readings. Once a firm has the readings, they might send a catch-up bill if the estimated charge was too low.

Your energy company may be able to backdate bills past this 12 month cut off if you purposely prevent them from taking an accurate reading.

What to do if your energy company tries to backdate your bills

If your energy company sends you a backdated bill, the first thing you should do is check how far back the billing period stretches - you don’t have to pay for any energy use that stretches back more than 12 months.

If the backdated bill is for the last 12 months only, then you need to make sure that what your energy supplier is claiming is correct.

This means checking the meter readings displayed on the oldest bill in the 12 month period (if, for instance, you get a backdated bill in January 2020, you should check your bill from January 2019) and checking the meter readings on your latest bill.

You should then check this against the latest readings on your meters - if they tally, then your supplier is right and you’ll need to pay up. If not, you should get in touch with your supplier and tell them what the issue is. It’s likely you’ll need to go through your supplier’s official complaints procedure to get the issue resolved.

If you can’t solve the issue with your supplier, you should get in touch with Citizens Advice on 08454 04 05 06 or at their website.

If the matter is still not resolved, you should take your complaint to the Energy Ombudsman.

For more information, check out How to make a complaint about your energy supplier.

The best way to avoid backdated energy bills is to give regular meter readings to your supplier, or fit a smart meter, which will automatically send updates to your supplier.

Ultimately, if you’re unhappy with your current energy company’s billing or customer service, the best thing to do is to switch supplier. It only takes a couple of minutes to compare energy deals with UKPower, and we can have you switched and saving money within 21 days.

Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.

Les Roberts - Energy Expert at UKPower

Les Roberts - Energy Expert at UKPower

If you’ve got an issue with your energy supplier, our consumer champion Les is on hand to help. A decade in consumer affairs means Les understands how confusing energy tariffs can be, so he'll cut through the jargon to help make sure you get the best deal.