Caroline Flint is an opportunist little bitch isn’t she?

Flint said: “I am really shocked by these allegations. These companies say they want to rebuild customers’ trust, but with practices like this it’s no surprise people are mistrusting of the energy industry. It is simply not acceptable for suppliers to overcharge people on top of the extortionate bills they are already paying. When customers are in credit, this should be repaid. If companies can’t find customers to repay them, they should use this money to keep bills down or help other vulnerable customers, not boost their profits.”

So what brought this on?

Under the current system, energy companies estimate customers’ future usage and charge accordingly. If less energy is used, credit is built up which can be reclaimed or used to offset higher-than-expected subsequent bills.

The profits from “credit” were taken by British Gas in cases where private or business customers had been overcharged on the basis of estimated bills, and then changed to another supplier, or ceased using British Gas for other reasons, with the outstanding sum owed to them still on their accounts.

British Gas – which argues that it is unable to track down all customers who have left them, changed addresses, or gone bankrupt – used to wait six years before taking the cash. But the whistleblower claims a special team was set up – partly based at a Leicester call centre – to fast forward this process so that investigations to locate people would be launched, and the money then taken into company accounts over a much shorter timescale.

Under this new arrangement, British Gas then took years of accumulated credit owed on accounts to augment its income. While there is nothing illegal about this, the source said British Gas was apparently nervous about how the move would be viewed if it became public. “We were briefed about how sensitive this was and there was endless talk about how this would look if it ended up on the front page of a newspaper,” said the whistleblower. He believes that all the other power companies also take this kind of money back into their accounts as profit but only after six years.

British Gas confirmed that it had set up a team to improve its credit balances but declined to say exactly what contribution it made to the business. A spokeswoman said customers in credit could always ask for the money to be refunded. She added: “We did improve our revenue and billing processes and this was fully audited and highlighted in our annual report in 2011.”

Right, now try to think through this. Estimated amounts sometimes led to overpayment. That overpayment belongs to the customer, of course. Not all of whom can be traced. The traditional system is to leave it there for 6 years then, well, it’s an orphan payment, someone’s got to have it so why not the company?

British Gas decided that it wouldn’t just leave it there for 6 years. It appears that it tried to speed up this process. Note what speeding up the process means: trying to get those orphan payments back to their rightful owners faster. This new faster system also accelerates the finding that some of the amount is indeed orphaned: but note again that it speeds up the process of returning not properly orphaned funds.

And for this BG is being criticised?

By the way. Caroline Flint was a member of the Cabinet (I think? She was certainly a Minister and absolutely damn certainly voted for the bill that did this) when Gordon Brown accelerated the confiscation of orphan bank accounts. Some journalistic type might well want to contrast her acquiescence in that change with her horror at this one.

17 comments on “Caroline Flint is an opportunist little bitch isn’t she?

  1. I spot a Jim Hacker-style British banger moment.

    Ed should look to see if there’s a spill on.

  2. Speeding up the process means that the customer is less likely to be untraceable so is more likely to get his/her money back so this overdue improvement in accounting systems will have *reduced* British Gas’ profits.
    Do you want to replace “opportunistic” by “stupid”?

  3. So I stop being a customer of a business, knowing that they owe me money. Over the next 6 years I do nothing to get the money back myself. I don’t let them know my contact details. They try to find me but In the end they give up and keep the money.
    On what planet is that the company’s fault, rather than mine?

  4. “…trying to get those orphan payments back to their rightful owners faster. This new faster system also accelerates the finding that some of the amount is indeed orphaned: but note again that it speeds up the process of returning not properly orphaned funds.”

    Not necessarily – it depends on factors that we are missing the information for. For example

    Are there any specific demographics that these orphaned accounts usually belong to and are these particularly likely to be lost track of?

    What is the likelihood of orphan accounts being reunited with their owners over time – and by speeding up the search process how many potential owners of these accounts will lose out?

    How many more orphan accounts have been reunited with their owners under the speeded up system than under the previous one?

    Lacking this analysis, then, if true, ‘the source said British Gas was apparently nervous about how the move would be viewed if it became public’ suggests that there was an overall benefit to British Gas to the detriment of owners of orphan accounts.

    If they could prove a benefit to orphan account holders don’t you think British Gas would be shouting it from the rooftops?

    Sometimes individuals in companies really are nasty little money-grubbing shits.

  5. I prefer not to think that a woman has attained a position because she looks right.. but given what a fuckwit she is, it’s hard to believe that she got where she is for any reason other than being a ‘presentable’ figure. The only skill she seems to have is reciting official party soundbites which, to her credit, she manages to do brilliantly.. never being nudged off track by distractions like ‘questions’ or ‘facts’ or ‘rational thought’.

  6. @ Doug Young

    “Lacking this analysis, then, if true, ‘the source said British Gas was apparently nervous about how the move would be viewed if it became public’ suggests that there was an overall benefit to British Gas to the detriment of owners of orphan accounts.”

    Not so. It suggests that BG believed that it would be spun as such. At worst, the owners of the accounts are no worse off.. this doesn’t change who is owed what, it’s just a shift in accounting whereby BG make an earlier call on whether the money will be claimed.

    BG does get a benefit.. a one-off profit bump from recognising ‘income’ earlier. But if the owner comes forward later on, they’ll still be entitled to the money.

    BG may have been nervous that any change in policy would bring the whole issue ‘up front’ and start a debate about how these billing processes work and such like. I do wonder why orphan account arise.. as the suppliers know the bank details of the customer (they’re taking DD’s) and they know when an account has ceased (someone cancels the DD and either a new supplier gets the account, or a new account gets the supply) so if there are a lot of these orphan accounts then it suggests that they knowingly sit on the cash waiting for the customer to ask for it back. Maybe we, here, think that’s fair enough… but it won’t play well in the outside world. However.. none of that is affected by this policy change.

  7. “BG may have been nervous that any change in policy would bring the whole issue ‘up front’ and start a debate about how these billing processes work and such like.”
    It seems that British Gas (not BG, that’s the oil & gas production company that split off a decade ago) deliberately overestimates by a couple of £ a month future consumption for budget accounts so that it isn’t left with a lot of uncollectable debts (because random variations mean some customers use more and some use less energy in any year than the previous year) when customers leave, Of course the debts may be collectable in theory but the cost of collection is likely to be ten or twenty or even 100 times the amount of the debt.
    British Gas do not want the tabloids to make a splash about their systematic overcharging [once the customer has built up a credit, Centrica offsets that against next year's bills so it doesn't keep increasing, but do you expect any tabloid to explain that?] even if it simply to avoid having to sue ex-customers.

  8. We have gas meters in our US town so we pay for what we use. Don’t know why BG can’t do the same, but their estimate-system would annoy me. Our city read our H20 bill every other month and estimated the between months to bill monthly. So many people were upset, they changed and say they read it every month (but I’ve noticed sometimes we use exactly the same amt for a few months in row).

  9. @ tex

    If someone reads your meter every month then you’re paying for someone to read your meter every month. I’m not, and I’m fine with working on an estimate basis to save that money. I can check the accuracy of estimates if I want, and I’ve never had a supplier refuse to give a refund I’ve wanted, or amend my monthly payments.

    The system works fine. The ‘orphan’ problem is down to careless consumers. Blame them, or blame the education system that doesn’t teach how to do real life.. but don’t blame the system. It’s not exactly rocket science.

  10. I seem to remember being given an estimate each quarter, and if I didn’t like it I could go and read the meter myself and provide them with the accurate figure. Every now and then they’d send somebody around to read the meter himself. Worked pretty well, I thought.

  11. Running a business in the US I could skip-trace a customer in 3 months max. So either a UK law prevents this or British Gas is lying & Ms Flint is correct.

  12. “I could skip-trace a customer in 3 months max”

    For free? If not then why should British Gas incur the cost? The law on escheats has been around for quite some time. An escheat is revocable, but quite fairly that puts the onus on the person whose money or property has been legally re-titled. If a good-faith effort has been made to find the legal owner of the money or property then that fully satisfies the demands of both legality and propriety.

  13. @tex, nothing stops anybody from reading their meters and submitting a reading everyday if they so desire.

    The good thing about this system is that you overpay in summer and underpay in winter so that your payments are fairly even during the year and there is no nasty surprise come the end of winter.

    It just goes to show that politicians have nothing to say of substance, notwithstanding the fact that they might not be intellectually able to.

    That said, she got elected, so what does that say about the average voter’s brain capacity…

  14. Thomas, Q: What’s stopping BG from getting the customer’s details from the bank and sorting out the issue quickly? A: Data protection. So UK law does make it difficult and costly.

  15. @ SBML

    But they can refund money taken by direct debit without asking for any details or breaching any laws so, in fairness to those who would bash the suppliers, if they have cause to know a) that an account is closed and b) what the correct bill is.. then they should be in a position to repay all but the few customers who close that bank account before the refund is made.

  16. @ TTG
    The problem does not arise with variable direct debits – it is those with budget accounts or pre-payment accounts and these offer (or used to) alternative means of payment.

  17. @ David G $10/head in bulk 12 years ago, I think it’s got cheaper since, what with the march of technology
    @SBML. Good point, no skip-trace needed: because unless the customer pays in used fivers (surely highly unlikely), the GasCo has a bank account to remit the debt to (from a DD or cheque).
    So it seems the GasCos are relying on David G’s escheat wheeze, whereby although they know they owe you money, and only they can calculate how much, if you don’t ask for it, they keep it. Very Swiss. Game to Ms Flint.

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