A musing (but not amusing) about Shell and Direct Debits...

  • 13 December 2021
  • 7 replies

Userlevel 7
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  • Rocket Scientist
  • 13666 replies

This first “paragraph” is for those who may not be regulars and is to give this question some context.
Pure Planet operated a 60/40 split on their direct debits, thus the October to March payment was always 1.5 x the April to September payment. 
The example I always use of £1200 a year is looking a bit cheap now so I’ll double it. 
If your annual was £2400 you would pay 6 x £240 in the colder months and 6 x £240/1,5 = £160 in the warmer months.(£1440+£960=£2400). This would be equivalent over a year to 12 equal monthly payments of £200


When PP folded we were into the cold period thus the payments were at the higher amount. 

But Shell as far as I know don’t operate a cold/warm split so what are they going to do about DD levels? 

Let’s put to one side that the price cap increase which will shortly be announced*, and which very likely will mean their best option is to ignore the fact that payments are set to 20% higher than they should be because the likely  increase is making the 20% extra of far less consequence.
* (expected to be announced in Feb for the April change but my guess is it will be delayed by as long as they can get away with it - they being Ofgem) 

In a world where it might be assumed that most customers might stay with Shell for a year (a not unreasonable assumption in the volatile energy cost circumstances in which we find ourselves), I would expect one of the two following options, either: 

  1. Shell review (or say they are going to review) every account based on current balance and usage individually and set a new payment to suit (I don’t think this is viable in the short term as it would take much too long - I think we can assume this won’t happen quickly enough) or
  2. They take the current payment as informed by PP and reduce it by 20% because they assume the customer will be with them for a year, and then when the price cap increase is announced apply a percentage increase from April (new tariff) to everyone who has migrated onto the flexible 6

(But what my expectation is won’t happen in reality?)

So why am I posting this? Because I have no idea what Shell have decided to do, what their philosophy or attitude is in regard to the payments being higher than a 12 monthly option would be, and I doubt anyone will get a coherent answer about this unless it’s possible to speak to someone who was involved in the migration. 

My guess is, given the circumstances, that Shell will just leave the payments at a 20% overpayment, and not do anything. If that happens I think a mass complaint either to Ofgem or the Ombudsman  will need to happen, because if Shell can’t prove they are treating every case individually, the treatment of the DD levels would have to be before the customer complains  they  certainly can’t argue that they were unaware that initial payments were set 20% higher than they would have been had it been 12 equal payments.

Looked at with a little logic, once they’ve had 3 (actually it’s two and a half, but you can’t have half) payments at the higher rate the remaining payments should be set to (approximately) the monthly amount calculated were it 12 equal months. (3 payments would be £720, take that from £2400 leaving  £1680 over 9 months or £187 a month, slightly less than the £200 it would be if there were 12 equal payments)

My guess is that Shell are going to say that each case will be treated individually but it would be really easy for them to reduce the DD’d globally (PP globally not Shell globally) to equalise this situation in the medium term.

Ok now you can tell me why it shouldn’t happen?

7 replies

Userlevel 7
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Intriguing read woz. Shame don’t know someone on Green to see how they have been done May give us for warning. 

Userlevel 7
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Interesting  indeed. 

Fear  not as due to the price cap you ARE certainly paying less than i am at the moment (€ 0.38 per/kwh appox 32 pence ) but it will change in april. We dont have a price cap. 

I fear your new look DD payment will be worked out on mass by the computer in the parking lot with zero human input once all your info has been handed over by PP. 

Userlevel 7
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Are Shell even aware of Pure Planet's summer/winter split. I think it will all depend on how our information is shared with Shell.

They could for instance be given the current payment amounts and just use them, with a review further down the line, which apparently they do every 3 to 12 months

They could be given the annual usage figures as per the latest statement and calculate the payments taking into account any credit/ debit in our accounts.

I did a quick calculation a few weeks ago, using my current estimated usage my DD payment will be about £10 less than the PP winter amount, so initially we won't notice any difference, it's only when the April payment comes and we expect it to drop, but given the timing of the price cap it's likely to increase even  further ( by a lot )

Userlevel 7
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I doubt they will do the split payments as shell normally does one monthly payment. Doubt they would do it just for PP customers as we are now Shell customers and are on their processes and not PP. 

Userlevel 7
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I find it hard to believe that Shell would not be aware of PP’s DD split payments. I have just assumed that when the migration is fully complete that the same payments procedures applies to all concerned, so standardised to their current system.

The Robots in the account office will spin the abacus and bobs your uncle. No more Friday team congas, vintage champagne and phat cubans for wattBot - the dudes already booked on the abacus training course joining his fellow can heads. I suggest a secret rescue mission. Who’s on Board?

Badge +5

I thought it was clear from the outset that Shell have a variable direct debit which they review every 3 to 12 months depending on usage. Not a split system. By agreeing to that we are given a 4% discount.  Plus of course we are new customers joining their existing system, we fit in with them not they with us. From what Shell tell us I never thought it was anything other than this.

Userlevel 7
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Shell have a few payment options, you can pay by variable direct debit where you pay the cost of energy used each month, these payments are taken 14 days after the bill is produced.

You can pay by monthly direct debit where you can spread the annual cost over 12 equal monthly payment, these are made in advance.

Both methods are eligible for a discount which will save £24 per fuel per year. You can also change the payment method yourself via the options in you account/app, so if you build up a healthy credit by the monthly method, you give yourself a payment holiday by changing to variable as the cost would come out of your credit, although changing from variable to monthly is more difficult than monthly to variable.

It is also interesting to note that you can change the payment amount in the app if you think you are not paying enough. There is a calculator which analyses your usage and determines how much you should be paying

You can also pay by making a payment by card using the app or by phone, without setting up a direct debit, but this method is not eligible for the discount

There is also of course the option of a prepayment meter