Martin Lewis backs calls for six-month limit to energy firm back-billing

Consumer champion Martin Lewis has backed calls for energy back-billing to be limited to six months as he singled out Scottish Power for being “particularly abominable” at the practice.

Appearing in front of the Energy Security and Net Zero Committee, Mr Lewis said the “principles” of back-billing were “certainly clear” – that firms should not back-bill customers for energy used more than 12 months ago as long as there has not been an unreasonable obstacle.

He told MPs: “Now that is pretty plain. For me where there is confusion is Ofgem doesn’t describe when the back-billing exemption is valid.

“We all know that the definition of reasonableness depends on who’s looking at it.”

He went on: “I think we have a systemic problem of lack of enforcement over the back-billing rules, over a flaccid energy ombudsman, which I think is a real problem, and one of the things that we have discovered when looking into this issue is we think there is a real issue… that what energy firms are doing is they are saying if customers are in credit when we are back-billing – so they know they’re back-billing – it is fine to take the credit when they’re back-billing because we’re not asking for money. That is not fine.”

Singling out Scottish Power, Mr Lewis said: “I don’t think there’s a chief executive who has sat there and said, ‘Let’s go and back-bill and get every penny we can can.

“I think energy firm billing systems, and certainly there are some who are worse than others – Scottish Power has always been particularly abominable; I hope it’s improved over the last few years but I know that I can say that here without any worries, so I will say it: Scottish Power has been particularly abominable with its billing over the years – and I think there is just a lack of care and a lack of being really strict and saying that you can’t back-bill.”

Asked if he supported calls to reduce the allowable back-billing period to six months, Mr Lewis said: “We live in a modern digital age where we’re trying to have smart meters installed that can give you an instant reading of what is going on in your energy system.

“Why should a firm take over six months to give you a correct bill? I can’t see any reason for that.”

And asked if he would like to see more of a crackdown from Ofgem, he answered: “Yes, I would like to see more specific rules from Ofgem on what does and doesn’t count on back-billing.”

The committee asked Mr Lewis if the amount of consumer switching between firms had led to an increase in the amount of wrongful back-billing.

He answered: “I think we’re hearing more about back-billing because bills are bigger, so back-billing is bigger.

“I think the reason for this raising its head higher is… probably a function of the size of bills. People care about it more.”

A Scottish Power spokesman said: “Scottish Power has worked hard and made great strides in customer service, with Citizen Advice ranking us as the best big supplier.

“We have robust processes and a unique customer system which consistently delivers a high performance on billing for our customers.”