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What is back-billing?
Back-billing happens when suppliers do not bill a customer for some time but then issue a bill for energy that has been consumed but not previously billed. This happens for a number of reasons, e.g when suppliers make mistakes in reading a meter or when meters have been wrongly calibrated.
What is Ofgem doing about it?
We brought together suppliers and consumer groups to tackle this issue. Suppliers were asked to develop a set of self-regulatory standards governing the way they deal with their micro business customers on back-billing. They have currently agreed to put in place a voluntary time limit for how long a micro business customer can be back-billed of three years for electricity and four to five years for gas. This can be compared to the current practice where suppliers normally bill customers for up to six years retrospectively. Suppliers are expected to sign up and implement the standards from April 2012. This is a step forward, however Ofgem considers back billing could be limited to one year for micro business customers, where suppliers at fault. A number of suppliers have already pledged to do this. We published our initial policy position on back-billing in December 2011.
An update on this position is set out in an open letter October 2012.
Please click here for ‘A summary of suppliers’ current positions [pdf].
Where can I find the back-billing standards for micro-businesses?
A copy of the standards for micro-businesses are available here.
Billings based on meter readings
As of November 2011, suppliers have a new requirement (SLC 21B) relating to customer meter readings. If a customer (domestic or business) provides a meter reading to their supplier, or if the supplier takes their own meter reading, the supplier MUST take all reasonable steps to:
- Reflect the meter reading in the next statement of account or bill (that includes an invoice or a demand for payment), if the supplier considers that the reading is reasonable accurate, and
- contact the customer to obtain a new meter reading from them if it does not think the reading it has is accurate