Smart Meters End Direct Debit Problems

One of the most repeated complaints from the customers of utility suppliers is that they are frequently overcharged for their gas and electricity bills by their supplier. With intelligent utility monitoring, smart meters could put an end to fuel surcharges and make customers a lot happier about their fuel bills.

The standard practice in the UK is that customers are charged a fixed price for electricity and gas per unit of energy used. Customers can pay their utility bills based on a reading of their gas and electric meters. However, many customers are incentivised to pay by direct debit for their utilities, which can cause problems when it comes to billing.

Energy suppliers want direct debit payments as this means money will come straight out of a customer's account into their holding. Relying on customers to pay their bills on time is a hassle for energy companies, and chasing up customers who do not pay costs them time and human resources. Direct debit is a guaranteed way to extract money at regular intervals from customers, so energy companies offer a discount to encourage their customers to use direct debit. From the customer's perspective, direct debit is cheaper and easier to use, so it works both ways as a win-win situation.

However, with direct debit, customers are charged based on an estimate by the utility company on how much energy they will use. Recent research from the consumers association Which? has shown that nearly 70 per cent of customers are overcharged on their direct debits, with up to a quarter of all customers overspending on gas and electricity by £100 a year.

The answer to this problem lies in more accurate monitoring of energy consumption, and this is where smart meters come in. Smart meters replace your old gas and electric meters with a digital equivalent which measures exactly how much energy you have used in real time. Smart meters will end direct debit overcharging as digital information will go directly to the utility company at the end of each month telling them precisely how much energy has been consumed. Customers can then verify with their smart meters how much they owe their supplier, which will not only avoid any nasty surprises when the bills come through but should also help consumers conserve more energy to bring their bills down.

Olivia has written various articles about smart meters and has researched into the pros and cons. She also enjoys writing various other topics