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.”
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.