Another electricity scam? (For those on monthly instalments plans)

Azn310 on 21/09/2014 - 00:24
Last edited 21/09/2014 - 00:26

Is it just me or these electricity companies keep finding ways to squeeze every cents out of our pockets?

I find it harder and harder to explain what they do, so bare with me here: I'm with Click Energy at the moment, and their 'innovative' approach is that you pay them every month to avoid 'hidden surprises'. In one quarter of 3 months, they do estimates for the first 2 months and then actual read on third month and settle the remaining money I owe them. Sounds good right? Well here's their little trick.

They say that PER QUARTER first 1000kwh is 24c, next 1000kwh is 26c, remaining kwh is 29c. What they didn't tell you is that they would break that 1000kwh into 3 months, so you have 330kwh at 24c, 330kwh at 26c and the rest at 29c EVERY MONTH.

Then they be nice to you and say they estimate you only use 100Kwh first month and you pay $50 (pretty cheap right?), same for second month 100kwh - $50, life is good. Then comes the third month, actual reads. They say for that quarter I have used 1,900kwh, so minus the other 200kwh i have paid, I have 1700kwh all on the third month. They put it into their 'innovative' calculator and guess what, it says 330kwh at 24c, 330kwh at 26c, 1040kwh at 29c.

So using this system, they effectively rip me off of the 470kwh that was suppose to be at 24c and 660kwh that was suppose to be 26c. So instead of the quarterly bill of 1000kwh @24c, 900kwh @26c, total $474. I now get 530kwh @24c, 330kwh @26c, 1040kwh @29c, total $514 . A $40 profit per quarter, or $160 per year, on something that was suppose to save you money!

I was away for a couple months, came back to find all our previous bills like this. I plan to vent at them on Monday but I came to my senses and thought maybe I should ask the ozbargain advisors first. Is this something new to you or is it already standard practice? Do they (the energy retailers) have the rights to do this?

P.S. I think one way to prevent this rip off system is simply call up and tell them you want your estimates set at 330-400kwh per month beforehand. Gosh, why is electricity such a big mess, shouldnt it be simpler? I used to live in the ACT and electricity was smooth and cheap there, why shouldn't it be really? Why do we have to scout the market every 6 months or so?

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Comments

  • monty.melb on 21/09/2014 - 00:29
    +1

    I don't get there electricity plans. I don't know why they can't make it simple.

    • Diji1 on 26/11/2014 - 14:17

      Purely and simply the reason is to "bamboozle" people to take advantage of the fact that people can only hold small amounts of information in their head at once which causes them to see more value then there actually is. In this case it appears to have worked.

  • Davo1111 on 21/09/2014 - 09:28
    +1

    Venting won't make a difference, choose another provider.

  • Shadow54 on 21/09/2014 - 10:10
    +1

    Choose another provider. Red Energy is the best in Victoria. You don't have the kind of staggered price system you describe above and I'm sure you can be accommodated with a monthly payment arrangement. If your usage is, say, 3000kwh, split it in 3 parts and pay for 1000kwh each month; better than letting the provider do estimates.

  • airzone on 21/09/2014 - 11:20
    +1

    I'm with dodo and they just charge your previous quarter total / 3 per month… Alternatively you can nominate a value instead… But they just read your meter once a quarter.. And any money you have paid in advance is credited against the metered bill.. There's nothing suss about it.

    • Azn310 on 21/09/2014 - 13:55

      IIRC Dodo use the kwh per day system so its a bit different. I was thinking of switching to Dodo because of the good rates, but I heard their customer service is not so good. Whats your take on this?

      • 2jzzzz on 21/09/2014 - 14:30

        I've been with Dodo for about 6 months. They let you suggest a monthly estimate. I estimated too high and accrued a credit. Got it all refunded to me and I dropped my estimate. I have no complaints, but to be honest, even after generous percentage discount i'm not sure they are the cheapest.

      • airzone on 21/09/2014 - 19:52

        I never talk to them… Bill comes, it's paid, we're both happy. Hopefully it never goes sour

  • eatwell365 on 21/09/2014 - 11:23
    +1

    Correct me if I am wrong. The root of the issue is that government deregulates energy suppliers. Now XYZ companies can be energy retailers selling the same wholesale electricity from generator/s. At the end, product is the same, the packages are different. Creative ways flourish to sign up customers … who may land a "jackpot" if not reading the fine prints.

    • Azn310 on 21/09/2014 - 13:58

      Exactly. In many cases, there are not even fine prints to read, they just do what they want until you tell them they stuffed up. I read from whirlpool this one guy got his bills all wrong for 9 months, the retailers know but they kept quiet because money was rolling in.

      Pretty much similar to telecommunications industry, but it is getting worse. They are looking for smarter ways to trick you, and you only find out when the bill comes.

  • lovesabargain77 on 21/09/2014 - 13:28
    +1

    A big +1 to the OP.

    My elderly mother joined Click Energy through an offer from the FiftyUp club (think of One Big Switch but excusively for people aged 50+)

    She did this as AGL had slashed the discount she had been receiving and Click Energy were offering a 15% discount for paying on time with no lock in contract.

    The 'trick' with this offer is that the 15% discount they offer is applied to the following bill.

    Meaning that if and when you decide to change providers, you don't receive the 15% discount for your final period of usage.

    She also experienced the same issues with the billing as described ny the O.P.

    First two bills were estimates and very low ones at that (approx $75.00 per bill)

    The bill with the actual read has just arrived and her bill is close to $450.00 (with $66.00 discount to be applied to next bill)

    I have looked at the bills this weekend and they are an absolute nightmare to decipher, they make them way too confusing.

    • Azn310 on 21/09/2014 - 14:04
      +2

      Yes i have similar discount trick. And yeah took me 2 days to work out that their system benefits them by putting as much energy use onto their highest rates as possible. Most people would be neglected to analyze their bill because it is confusing and they dont have time. That is when these energy retailers make profit.

  • Azn310 on 24/09/2014 - 10:56

    Update: i rang them up yesterday and explained the situation. The call person immediate admit fault and tell me they will re-calculate and credit my account. So i think they know what they are doing is wrong but they will continue to do so unless you tell them you know what they have been doing. They are sitting on edge, so they can face lawsuit with this kind of practice.

    Luckily for me, i think Click energy uses a call centre in Aus or NZ so it was easier to communicate.

    Will update later on if there are any issues.

    P.s. I'm certain this applies to most bills paid by monthly instalments (which gradually becomes standard practice nowadays) regardless of energy retailer. So double check your bills and try to work out their tricks!

  • sash213 on 25/09/2014 - 11:56

    Thanks. I will review my bills.

    Origin called offering 19% on electricity and 16% on gas for 12 months with on lock in contract. Anyone got any better offers?

    • Azn310 on 25/09/2014 - 23:10

      Is that a no lock in contract?

      I dont know their rates but i found energyAustralia offering 25c, 25.1c and 25.2c per kwh (inc. GST), 15%, no contract, so pretty much fixed 25c doesnt matter what you use. cheapest i can find.

      Try energymadeeasy.gov.au , they have some pretty good suggestions

    • Shadow54 on 26/09/2014 - 09:42

      Compare Red Energy. The discount is on the WHOLE bill, not just the usage. Also you'll probably find the tariffs are a little lower as well. Good luck!

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