Avoid overpaying for utilities
Mital Goel, a 26-year-old account manager from Berkshire, bought a property in December 2008. It was a new development with a water meter, but she didn't move in until five months later.
"At that point, I wasn't living there full time," she says. "I was on a direct debit of £15 a month, but I got a water bill in the summer for £490." This was clearly wrong, so she called to complain.
The call centre staff told Mital they would monitor her bills, but despite several more calls, she got a bill in November for £920.
"By then, I was living here with my husband, but it's only a two-bed flat and we work nine to five, Monday to Friday. It was crazy: there was no way we were consuming that much water."
Eventually, at the beginning of this year, she persuaded Thames Water to send out an engineer. However, he simply said the meter was fine and that there were no leaks.
Mital was put on a direct debit in February for £81 a month – an alarming sum even for a family of five in a large house, but a total rip-off for a commuting couple. Something was clearly wrong; she just couldn't get Thames Water to recognise the fact.
Then – suddenly – at the end of June, Thames Water said it had replaced the meter, as they had decided it was faulty.
A common occurrence
Sadly, this is not an isolated case. According to uSwitch, three in 10 households have been billed incorrectly by a utility company within the last two years – 17% of these more than once.
In a recent survey by the comparison site, consumers voted energy companies as the worst for getting bills wrong – beating even HM Revenue & Customs.
The main problem lies with the practice of estimating bills. Hannah Mummery, senior quality advocate with Consumer Focus, says: "It isn't financially feasible for providers to read the meter every quarter because the costs would be prohibitive, so they usually check the meter only once every two years."
And it's not just a problem with customers being overcharged – sometimes companies underestimate bills and then play catch-up a couple of years later by sending out a massive bill.
The uSwitch figures show that over 11 million households have unexpectedly owed money to their energy supplier following a discrepancy between an estimated bill and a ‘real' bill.
These differences can be dramatic, with the average amount owed following a billing discrepancy being about £153.
Keith Heron, a 46-year-old engineer from the North West, was one of the many who never really checked his bill in detail. "I always paid on time and I thought that the amount was enough," he says.
Unfortunately, Keith's energy supplier had been estimating his bills for 18 months, and he had underpaid by over £200 in total. He had quite a shock when he opened his bill.
"I was lucky because I had savings to fall back on, but a lot of people would have struggled to pay," he says.
Gareth Kloet, an energy expert from Confused.com, says checking your bills is the only way to avoid a nasty surprise. "We encourage people to look at their bills in some detail. Check if it's actual or estimated. If it's estimated, you can do something about it," he says.
"A number of suppliers will also reward you for providing meter readings with Nectar points or discounts on the bill."
As ever, taking steps to prevent the unpleasantness in the first place is the best approach. However, if it's too late for that, you can still control the damage by being proactive.
Kloet says: "Customers have to take matters into their own hands. If you get an unexpected bill, phone your provider and explain the situation. You may be able to agree some sort of payment plan, or they may even offer you a grant in certain situations."
While estimates make up by far the largest number of inaccuracies, they're not the only problem. Technical problems or administrative mistakes on the part of the provider are also common.
Kerry Murdoch, a 36-year-old contractor from Birmingham, ran into administrative difficulties when she switched her gas and electricity from npower to British Gas.
The gas account was closed immediately, but the company refused to close the electricity account and return the money she had left in it because it claimed it hadn't received her final meter reading.
Although she had sent the two meter readings together, it took her 15 phone calls to get npower to close the account and pay her £35 for the inconvenience.
So what can you do if you've been wrongly billed?
The first step is to file a complaint with the provider, which then has eight weeks to try and resolve the problem.
That's what Mital did after her problems with Thames Water. "I went through the process and it said it would phone me back within three days," she says.
"Four days later no one had called, so I rang again. It said someone would call within two days, but again no one called me back.
"I felt as though I was hitting my head against a brick wall, so I googled one of the responded directors of the company and he immediately.
"Someone called within a couple of days and said Thames Water would stop the £81 direct debit, issue me with a new bill, and recalculate what I owed."
It sounds like a happy ending, but it wasn't. Mital explains: "I didn't get the calls I was expecting and no one could tell me how much I would be refunded."
In the end, Moneywise pursued Thames Water and Mital received a £170 refund, a £21 a month direct debit and an apology. "If it hadn't been for Moneywise, I don't know what I would have done," she says.
However, if Moneywise had been unable to help her out, her next step should have been to refer the complaint to the ombudsman. In the case of energy bills, this is the Energy Ombudsman (energy-ombudsman.org.uk).
If it's a problem with your water, the watchdog is the Consumer Council for Water (ccwater.org.uk). The ombudsman will assess your situation and make a ruling on how the problem should be sorted out.
The process isn't simple or quick, however. According to uSwitch, billing inaccuracies take on average just over two months to resolve, but can take far longer – some even run into years.
But there is hope on the distant horizon. Kevin Meagher, chief executive of Intamatic smart meters, says the roll out of smart meters will solve the problem of estimated bills as they are introduced over the next couple of decades.
In an ideal world, you shouldn't have to wade through complex bills to determine your correct usage and payment. But, in reality, it's worth taking the time to do this in order to avoid pain further down the line.
Beware changing tariffs
You can end up with a surprisingly high bill if you're switched onto a new tariff without warning – either because your fixed price deal has come to an end and you've been rolled onto the standard tariff, or the charges on your tariff have increased.
Gareth Kloet, an energy expert from confused.com, says: "When a fixed or capped tariff comes to an end, part of the original agreement will be that it will revert to another tariff. If prices have gone up in the interim, you could see costs increasing substantially without warning."
Surprisingly, there's no obligation for suppliers to give you any warning when your tariff changes. They don't even need to tell you when it has happened – and they can wait 65 days to inform you of the change.
It's a tactic that has come in for a great deal of criticism, as it gives you no chance to look around for the best deals, and can lead to unexpected bills.
And while some providers, such as Ovo, make a feature of fairness and informing customers, others stick to the letter of the agreement.
The only way to check, therefore, is to scrutinise any bills for the name of the tariff and check whether it's the one you signed up to.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.