Do not fall foul of incompetent utility companies

Beware of incompetent utility companies, warns the UK's Forum of Private Business, which said that SMEs could be left with a bill for thousands of pounds.

The Forum of Private Business (FPB) has sent a stark warning to its members that they could be left with a bill for thousands of pounds by incompetent utility companies.

The FPB, which represents around 25,000 small and medium-sized firms across the UK, has taken the action after one of its members was left owing more than GBP 16,000 because Scottish Power was incorrectly estimating the business's meter readings and then not updating their records when given accurate readings.

The FPB's senior Member Services representative, Philip Moody, said that, unless smaller businesses keep a careful eye on their meter readings, they may be left out of pocket.

"Some energy suppliers are happy to give you a low estimate, but the danger is that, if it is inaccurate, there could be a big bill to pay in the long run." Moody went on to criticise the approach of the energy companies.

"It is irresponsible to allow such practices to continue.

They may not miss a black hole in their accounts of several thousand pounds, but to a smaller business that is a lot of money." Jane Bates is an account manager at Utility Options, an independent energy consultancy, offering members of the FPB the best possible prices for their electricity and gas.

She advises that a close watch is kept on meter readings whenever possible.

"Business owners must read their meter because suppliers do not always check up on the accuracy of their estimations or even come to take readings.

Businesses should check at least once a quarter, if not monthly, and inform the supplier.

If there is a problem, try to intervene as early as possible.".

* FPB member left with massive bill - FPB member Reflections, a photographic laboratory in Norwich, has been left with a massive outstanding bill after a catalogue of errors by its electricity supplier.

Jenita Nemar-Smith is a partner in the firm and says, following the business's switch to Scottish Power in 1998, things started to go wrong almost immediately.

"It was agreed that, after the first year, the meter would be read and payments would be adjusted accordingly.

At the time, our electricity consumption was going down as we were replacing heavy usage equipment with more efficient equipment.

With our previous supplier, we were paying GBP 357 per month, but were always in credit.

When we changed to Scottish Power, we were refunded more than GBP 600.

We thought, therefore, that a reasonable start for the first year with Scottish Power would be GBP 333 per month.

They didn't take the direct debits for the first two months and, on each occasion, we had to alert them to this fact." But, she continued, "We never actually received a correct invoice, even when we supplied the readings.

Scottish Power either entered the figures incorrectly or transposed them against day and night readings.

A new meter was installed in March 2000, which we thought might lead to correct billing.

It didn't.

We, along with our accountant, tried for over two years to get correct bills, without success.

As a last resort, we stopped the Direct Debit in August 2001, thinking this would spur them into sorting it out.

Again, it didn't.

Scottish Power kept sending estimated and incorrect bills.

It was at this time we had had enough and decided to concentrate on our business rather than theirs and just paid the bills when they arrived." Reflections received another estimated bill May 2005 and, on reading the meter, noticed that the figures seemed to be a lot higher than they thought they should be.

They rang Scottish Power to report a possible fault with the supply.

The response shocked them, as Nemar-Smith explained: "They sent us massive bills of almost GBP 20,000! We started to take our own readings on a regular basis and supplied them to Scottish Power and asked them to calculate the outstanding bill using them as a guide.

However, they insisted that they would bill us back to March 2000 with a usage estimated to be 190 to 230 units a day.

That's far more than we use, which we calculated was more like 120 units a day!" Reflections received a letter in December 2006 saying that, from 15 March 2000 to 5 November 2006, they had electricity charges of GBP 28555.53 against payments of GBP 8633.93 (actual payments between February 1999 and July 2001 were GBP 12522.75) and they would take payments by Direct Debit of GBP 500 per month over four years to clear the outstanding balance of GBP 19921.59, in addition to a further GBP 422.24 per month for ongoing costs.

"It was at this point that we contacted the FPB," said Nemar-Smith, "Who put us in touch with Utility Options.

They managed to get us a reduction of GBP 4980.40 for over-estimation." Reflections told Scottish Power they were prepared to pay GBP 350 a month by cheque or standing order, and to pay ongoing bills in full, if they were correct.

The onus would then be on Scottish Power to get the bills right.

However, the energy supplier would not have it and, following the first cheque for GBP 350 on 8 March 2007, which was duly cashed, the energy supplier replied on 15 March that, as Reflections had refused the payment option, the full amount was due.

"We have tried to get them to accept a standing order," said Nemar-Smith, "But they are insistent on a direct debit, even though it says clearly on their bill that standing orders can be used.

We have been left in a position where we now have to pay GBP 700 per month to cover the outstanding bill and ongoing supply.

We had no option but to agree to the direct debit as Scottish Power had started disconnection procedures, which would have effectively put us out of business.

It's going to be difficult for us and could cause a cash-flow problem.

It also means that we are probably paying for power we have not used.

Throughout this whole fiasco, Scottish Power have used 'bully boy' tactics.

Their attitude is that they are right and that's it.

Neither do they like leaving a paper trail; they prefer to be a nuisance by calling nearly every day.

We wrote to them last on 19 March 2007 and asked them for a response in writing.

We are still waiting for the reply." Nemar-Smith was not holding her breath for help from the UK Government.

"I'm sure the Government will not do anything to bring the utility companies into line as they collect more revenue this way.

This gives the utilities carte blanche to treat the consumers with contempt".

* About Utility Options - Utility Options has been established since de-regulation in 1994, finding the right options to match customers' needs.

By finding the right supplier and, more importantly, for the right price, members of the FPB have saved thousands of pounds.

With energy prices rocketing over the last few years, it is now even more difficult for single businesses to find a good price.

Utility Options' group scheme gives the company a powerful position with suppliers and is confident that its negotiations will get results.

Utility Options has also been able to save customers considerable amounts of money by knowing what the market trends will be.

Through recommending the length of a contract to maximise on these fluctuations, it has been able to optimise savings.

Furthermore, there is no charge for FPB members to use these services.

Utility Options is happy to claim a small commission from the supplier when it places business with them.

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