[Worried]

why should I be charged more for not paying by direct debit? I have zero balance on my account and use the app to pay the exact bill but by not paying by direct debit I get penalised. There is no requirement for any staff interaction to process an automated payment so why different charges? Will I still receive the discount with no direct debit in place?

[Boatrain]

I imagine it’s because they are getting a guaranteed payment every month so it’s in their benefit.

think of it as a discount for paying DD as opposed to being charged more for not paying. Like it people pay their car insurance upfront for the whole year, it’s discounted as it’s a guaranteed payment for the company.

Not necessarily agreeing with this, especially given the current climate but you see it in all sectors. Discount for bulk buying etc

[meldrewreborn]

@Worried

Under the price caps the maximum rates for DD, prepayment and standard credit methods are specified. In turn these are derived from industry wide costs relating to the 3 methods. Paying by DD is the most efficient method which is why it produces the lowest tariffs.

I suspect that prepayment has costs related to the meters and commissions to payment points, while the level of arrears and defaults are likely higher on standard credit terms.

I think you're not going to win this argument, and its entirely up to you whether to continue paying as you do or switching to DD. DD is over £200 cheaper annually for the average user as defined by OFGEM. While I've had issues with DD with some suppliers, the DD ultimately doesn't increase my actual bills which are related to my consumption times price, so I continue to use DD

[Landmark]

Originally Posted by Worried

why should I be charged more for not paying by direct debit?

Because direct debit is automated by computers and saves manpower and thus money making it easier by eliminating the possibility of forgetting to pay and is therefore more reliable too making the pros outweigh the cons of the scheme.

Originally Posted by Worried

I have zero balance on my account and use the app to pay the exact bill but by not paying by direct debit I get penalised. There is no requirement for any staff interaction to process an automated payment so why different charges? Will I still receive the discount with no direct debit in place?

Why are you so averse to Direct Debit, when I have spelt out the advantages of Direct Debit; but that's not the real problem, that is a red herring you are presenting here. Actually the real issue is that the company set the ***Fixed*** Direct Debit to an arbitrary figure they see fit in order to keep your payments up to date without a significant chance of ending up in arrears, however the problem with this is that they err on charging too much rather than too little to create a buffer by holding a balance of your money. To get round this don't throw the DD baby out with the bathwater; rather go to ***Variable*** Direct Debit as opposed to ***Fixed*** as I have described in another thread about Variable Direct Debit here

At least you are better off than having a prepayment meter😉
When you have seen that Direct Debit is not the enemy here, you might consider this alternative option, given that you still pay the same price per unit of KWH and standing charges. If however you have difficulty managing your money, you are entitled to ask for help.
Let us know how you get on here, whatever option you choose.
Take care

[Mari]

@Worried

Hi Worried, I've been searching for answers about direct debit 'discounts' for some time. You're asking WHY you are penalised for NOT paying by direct debit, reasonable question. However, why you don't receive a DISCOUNT is a separate question. I don't think there is a 'discount' as such; you pay the regular amount if you pay by direct debit. You pay more if you don't. No discount, it's just more expensive to you if you don't pay by direct debit.

[meldrewreborn]

@Mari

I'm afraid the harsh truth is that paying after receipt of bill by cash cheque, Bank transfer or APP has large numbers of customers who do not pay on time or indeed ever. Companies cannot distinguish between those that do pay on time and those that don't in setting pricing, , but Eon Next does allow people to pay after receipt of bill by DD, and thus get the DD pricing. Some other companies don't allow this (e.g. OVO) so why people want to pay by app when the DD on receipt of bill would do the work for them and save circa £200 per annum is beyond me. It seems that some people want companies to bend their systems to meet their individual wishes, rather than comply with the companies set systems.