Martin Lewis has issued a fresh warning to those who pay their energy bills via direct debit in response to a complaint that one energy customer was being denied their credit back.
Appearing on ITV's This Morning earlier this week, the MoneySavingExpert founder responded to one viewer who called in from home to seek advice after finding themselves thousands of pounds in credit on their energy account. Co-host Josie Gibson read out the plea for help from the viewer, who said they had a total of £2,500 in credit on their energy account but their supplier had refused to give them a refund.
Martin responded by outlining how credit works when it comes to paying energy bills by direct debit - and why now is the best time to claim it back. But despite telling the viewer to raise a formal complaint with their supplier, the financial expert urged viewers at home that direct debit is the best way to pay for energy, the Daily Record reports.
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Responding to the viewer's situation, Martin said: "At this time of the year you should have minimum credit. Now, £2,500 in credit sounds a lot but I have to say it does depend on what your bills are."
He added: "I tend to say if right now you have a month or two worth of direct debit in credit - so let's say if your bills are £300 a month - if you've got £500 of credit that's probably on the high side. So unless your direct debit is over £1,000 a month, which is unlikely but does happen, it sounds like you are too much in credit."
Martin went on to explain what the bill payer's rights are when it comes to claiming their credit back. "The fact that energy bills will be dropping in July means you don't need as much credit as you did. Now, under energy firms' licence and conditions they cannot unreasonably hold on to your money," he emphasised.
"I would make a formal complaint asking them to justify why you are so much in credit and unless you get a decent justified answer, I would then take them to the energy ombudsman." He also suggested telling the company of this intention before escalating the situation to the ombudsman, as this may prompt them to make the refund.
However, when Josie quizzed Martin on whether simply cancelling the direct debit was an option, the money expert was quick to discourage this course of action. "Direct debit is the cheapest way to pay - payment in receipt of bills can be six or seven per cent more expensive," he explained.
Martin went on to advise: "If you really don’t like paying by monthly direct debit, where your usage is smoothed out over the year, then ask [your supplier] if you can switch to variable direct debit that keeps you on the same cheap rate but then you pay each month based on what you've used.
"But do remember, when it comes to winter that means your bills are going to be massive - in summer it's easy, in winter it's not. The problem isn't monthly direct debits, it's the terrible implementation of the way a few firms do monthly direct debits."
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