Level pay and budget plan

Dispute

The customer opened a gas account with a supplier and signed up to a level pay/budget plan where the customer’s monthly payment amount was set at €45 per month. The customer noted a rising balance of arrears on his monthly bills and contacted the supplier on many occasions to query the rising balance. The customer was continually advised by the supplier that his payments of €45 per month would cancel out the arrears over the course of the year.

A few months later, the supplier increased the customer’s monthly payments from €45 to €65 per month; however, this increase had little effect on covering the rising arrears on the customer’s account. The customer lodged an official complaint with the gas supplier; however, his calls were rarely returned, and no attempt was made by the supplier in question to resolve the matter until the complaint was escalated by the customer to the CRU.

Outcome

The CRU investigated and upheld the customer’s complaint in relation to the many customer service issues the customer had encountered in attempting to get his complaint resolved. The monthly budget plan payment as determined by the supplier was at no time sufficient to cover the customer’s actual gas usage and led to arrears accumulating on the customer’s account. The total debt accumulated by the customer at the end of his contract period was €700.

A budget plan is designed to even out customer payments throughout the year. However, in order for budget plans to work correctly, the plan needs to be managed by the supplier to take account of a customer’s actual usage; suppliers in turn need to apply appropriate increments to monthly sums if it is noted that the monthly payments are not enough to cover usage. In this case, the supplier should have conducted a full audit on the budget plan where arrears continued to accumulate.

The CRU directed the supplier to award the customer €330 in charter payments for its many customer service failings and for failing to manage the budget plan effectively. The supplier also agreed as a goodwill gesture to write off the balance of €360 owing on the customer’s account.