Did you know that over 70% of Britain’s SMEs are overpaying their utility bills?
That’s 7 out of 10 small businesses that still haven’t made the switch despite being ridiculously overcharged by their current provider.
However, that does not necessarily mean that they have been scammed (although some might have been). In most cases these charges are usually accidental. A utility bill comes with several components, so it’s no surprise that human error may be involved. For some consumers, defective equipment and meters can also be the sole cause of these extreme charges. That is why it is always important for small business owners to review their bills and make sure they are paying for the amount of energy they are actually using.
If you believe that your business utility bill is out of the ordinary, here’s how to tell if your current energy provider is overcharging you (and what you can actually do about it):
1 . Your Energy Consumption Hasn’t Changed, But Your Bill Has Increased
There can be several reasons why your utility bill has been going up. Keep in mind that it’s normal for your energy bill to change, especially during the colder months when the heating is used more often and the lights are turned on much earlier during daylight saving time.
Most of the time, older models of appliances and computer equipment tend to be faulty and less energy efficient. This explains why many business owners are urged to invest in new equipment that uses the latest technological advancements to ensure energy efficiency. For example: replacing a 10-year-old fridge with a much newer model will help the consumer save £107.65 a month on their utility bills.
However, if you are certain that your energy habits have not changed and all your equipment is up to date, then this could be a red flag and you should raise your concern to your current provider as soon as possible.
2. Your Provider Estimates Your Consumption Instead of Doing An Actual Meter Reading
The most common practice for charging utilities is through smart meters or having the old-style meters read by an agent or representative of any energy supplier. Subsequently, the consumer will be sent a bill consisting of the amount of electricity and gas used month in and month out. These numbers are taken directly from the meter.
Unfortunately, some utility companies employ the method of predicting how much energy their clients use. These estimates are typically based on the average amount consumed in the previous year. The reason they do this is because sending a representative to their client’s premises every month to read meters can be quite expensive.
Estimation can also occur when the consumer hasn’t been reading their meters regularly and failing to update their energy supplier.
On the other hand, it should be indicated in the bill if your invoice is estimated.
Energy consumers have the right to opt out of this type of method by contacting their respective providers. Besides, who would want to pay for predicted usage rather than an accurate measurement?
3. You’ve Invested in Energy Saving Equipment, But They’re Not Reflected in Your Utility Bill
Most business owners and residential consumers are already familiar with the additional steps they can take to reduce the amount of energy they consume. It’s quite simple: Invest in energy-efficient equipment like LED bulbs, inverter appliances, and modern computers.
However, despite these clever efforts to make changes, they may still not be reflected in your bill. This will cause you to pay more than you actually should. This can happen if your meter is faulty or there are errors that can be found in your documents or paperwork.
4. You’ve Noticed Inaccurate Information or Discrepancy In Your Utility Bill
You must always understand what you’re paying for. All energy consumers deserve transparency and concise information as to why they’re being charged a certain way.
Your bill must contain ALL the necessary and important information that should help you understand why you are being charged a certain amount. That includes the time period, your energy consumption, and the current rate you’re being charged, as well as the information and other important factors that expound how your provider has come up with the amount you owe.
However, sometimes the information on your bill does not mirror the information on an energy company’s website. This is why you must always double-check for any discrepancies between your utility bill and the company’s updated policies and/or rate changes.
If you do happen to find some errors and inaccuracy in your physical bill—such as being charged an OLDER (and much more EXPENSIVE) rate—please take it upon yourself as the customer and a business owner to bring these issues to light and save yourself from costly troubles!
How to avoid being overcharged for electricity:
1. Read Your Energy Meter Regularly
We recommend electricity consumers to submit AT LEAST four meter readings to their suppliers over the course of a year to prevent estimated billing. That means all you really have to do is read your meter once every three months and update your energy supplier on the regular.
If you are using a standard meter, take note of the numbers on your meter, excluding the ones that are in red and all the other numbers that come after it. Don’t forget to record the date.
Most of the big energy suppliers (British Gas, EDF, nPower, and EON energy) allow their clients to submit their readings online through apps, which is fortunately very convenient! However, submission of readings still varies from supplier to supplier. So it’s best for you to coordinate with your provider regarding meter reading submissions.
Smart meter users, on the other hand, don’t really have much to worry about since their suppliers can already track their exact usage.
Bill estimation will never see the light of day come June 2025, as UK homes and other establishments will be offered a smart meter by then.
You will be able to find out if your current supplier is estimating your consumption by looking for the word ‘ESTIMATED’ on your utility bill.
2. Check Your Meter For Defects or Damages
One way to properly check whether your meter is faulty or not is to turn off the main power switch in your office. If the numbers keep going up despite this, then it is clearly faulty. Also check your digital meter for error messages. Other warning signs such as unexplained power cuts and signs of leakage in your meter could be the cause of the sudden spike in your energy bill.
Immediately report these issues to your current supplier or hire an electrician to confirm if your electricity meter is faulty. You may use it as proof so you can contact your supplier regarding your invoice and possibly request a refund.
In most cases, the supplier will even send an expert to check your meter and have it replaced.
3. Do Not Be A Victim of The Dreaded Exit Fee
The Exit Fee (also known as Termination Fee) is normally applied to fixed rate tariffs—a type of contract that charges consumers a fixed price per kWh for an allotted period of time.
This fee is used by suppliers to ensure their clients won’t bail on them prior to the contract’s end date.
However, some providers still charge exit fees on variable rates. That’s why we always encourage everyone to read the contract and the fine print before signing up. Falling victim to the exit fee could limit your options during a price drop, leading you to pay heaps of money for your business’s electricity
In the event of a price increase, it is absolutely FORBIDDEN for energy providers to charge clients exit fees or a financial penalty of sorts.
So, if your supplier is charging you a certain fee or a higher rate (for when you want to switch to a different supplier), by all means complain. Remember, you shouldn’t be charged a higher rate that’s originally not part of the contract you signed up to.
Should you wish to leave by the time the higher prices come into effect, best inform your energy supplier about it.
4. Do Not Hesitate To Submit A Complaint or Query Your Bill
If you suspect that your supplier is constantly overcharging you, query your bill and claim a refund if they are ever proven to be at fault. Being incorrectly charged is actually quite more common than you expect. So it is worth noting that energy consumers are entitled to a refund once met with billing errors!
All energy suppliers are obliged by Ofgem to handle all customer complaints FAIRLY, so do not be afraid to lodge a complaint when your supplier is being unhelpful and uncooperative. On top of that, if supplier fails to respond within eight weeks (maximum), you can escalate your concern/complaint directly to the Energy Ombudsman who will then investigate the dispute
If you’re sure that your current provider has been relentlessly overcharging you, make sure to gather any evidence you might have, as well as a logged formal complaint after contacting your provider.
5. Never Underestimate The Importance of Price Comparison
Believe it or not, many consumers dread the idea of shopping around and comparing tariffs. Little did they know that a truckload of energy suppliers benefit from them. Why? Because even if their prices continually rise, these consumers won’t notice any difference as they barely search the markets for cheaper deals and plans.
Underestimating the importance of comparing prices is another sure way to be overcharged on energy for.
A default plan (a.k.a ‘standard plans’) is usually the main culprit of overcharging. A lot of suppliers tend to put consumers on a basic plan by default. This type of plan cost significantly MORE than other tariffs.
Not sure what type of plan you’re on? Well, if you haven’t made the switch for the last two years, chances are you’re already on a default or standard plan.
Visit a price comparison site such as Better Business Quotes to find the best deals, tariffs, cheap fixed-price rates, and dual-fuel plans in your area. Comparing energy plans on a regular basis won’t hurt you, since it’s pretty much FREE. It’s always better to know what deals are out there. By doing so, your business will be able to save THOUSANDS of money on electricity and gas.
Comparing energy quotes is pretty much a straightforward task that any business owner can do by themselves! All you really need is your postcode and a copy of your most recent energy bill.
6. Switch To A Better Supplier
Now that you’ve used an energy comparison site, the next (and most crucial step) is to switch to a different supplier—one that is far better than your current one.
It is worth noting that there are hundreds of smaller and independent energy suppliers who may offer better rates than that of the Big Six. Better Business Quotes provides dozens options and quotes from a huge selection of energy suppliers available in your region.
70% of UK-based SMEs haven’t switched suppliers within the past 2 to 4 years. Can you imagine how much money they could’ve saved had they spent a little as 60 seconds of their lives to compare all possible options? The more you miss out on better deals and promos, the more money you will end up spending. If anything, this could hurt your business’ budget and put you in much more costly situations.
If you think that switching to a different energy supplier is a lengthy process, think again! It’s pretty much simple and easy. Plus, the benefit you’ll get from doing so will be exceptionally hard to ignore.
We hope you found this article helpful! Please make it a habit to keep an eye on your business energy bills to avoid being overcharged.
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