Energy industry voted worst for inaccuracy

Consumers have named energy suppliers as the worst culprits for inaccurate bills, according to new research from uSwitch.com. Almost 9 million households - one in three - have had to deal with at least one inaccurate energy bill in the last two years.

On average these took just over two months to sort out. But, as one of the only industries to operate an estimated billing system and with suppliers struggling with outdated meter technology, is the bad rap deserved...?

Although suppliers work hard to resolve billing issues swiftly - 13% are dealt with successfully within a day - the reputation of the energy industry is suffering. Consumers rate it as the worst for errors, behind traditional bureaucratic bunglers such as Council Tax departments and the Inland Revenue. Even though 65% of energy customers have had their meter read by their supplier within the last 6 months, many fall foul of a discrepancy between previous estimated readings and the actual reading. And this is the root cause of the industry's issues over accuracy says uSwitch.com.

Over 11 million energy customers (43%) have unexpectedly owed money after a meter reading because the actual reading was far higher than previous estimates. On average customers ended up owing £137, with more than one in ten (11%) owing between £201 and £500. The problem is widespread - only 49%, less than half, of energy customers have never unexpectedly owed money to their supplier because of a difference between estimated and real readings.

However, the industry is working with outdated meter technology which means it is relying on a system of estimated and actual meter readings rather than being able to provide ‘real time' bills. Energy usage also fluctuates throughout the year, which adds another layer of complexity to an already difficult process. Therefore it isn't perhaps surprising that the industry has gained a name for inaccuracy. In fact, payments match usage on only 26% of energy bills - 40% of customers were owed money on their last energy statement, while 26% were in the red to their supplier.

Suppliers are working with consumers to overcome these issues. EDF Energy has introduced ‘Read Reduce Reward', a scheme whereby it gives customers Nectar points for submitting their own meter readings. Scottish and Southern Energy encourages customers to text in their readings and British Gas is shortly going to be bringing in a new SMS texting scheme too. All suppliers are also involved in smart meter trials. For example, E.ON is piloting smart meters as part of a two year £12m investment in metering technologies.

The efforts suppliers are making seem to be having some impact - 65% of energy customers have supplied meter readings to their supplier within the last 6 months - these are over and above the readings taken by suppliers. Overall, the number of consumers contacting energywatch about suppliers has fallen but, unfortunately, queries regarding npower have grown by 21% and, according to the watchdog, npower is the worst for billing. However, it has just moved all its customers onto a new billing system, inevitably experiencing some glitches along the way. npower has responded by investing an extra £2m in its customer services and has allocated additional advisors to deal with complex or lengthy complaints.

Ann Robinson, Director of Consumer Policy at uSwitch.com, comments: "I suspect that suppliers will continue to be haunted by this reputation for inaccurate bills until smart meters finally lay that ghost to rest - unfortunately that won't be for many years. In the meantime suppliers are trying to work with their customers to resolve the issues and tackle the root cause - discrepancies between estimated and actual readings - which can often leave households unexpectedly out of pocket.

"Suppliers are making it easier than ever for customers to read and supply their own meter readings and in some cases are even rewarding those who do so. But whether there is a reward or not, I would still urge consumers to respond to meter reading requests or to supply their own readings. Relying on estimates is never a good idea as you could end up in debt or struggling with an unexpected bill. The good news is that 65% of energy customers have given their supplier a meter reading within the last 6 months - a positive sign that consumers are ready to help suppliers provide a better, more accurate, service."