Energy back billing — do you really owe your supplier?

What is back billing?

Energy suppliers may sometimes send a "back bill" or "catch up" bill when you haven’t been correctly charged for your energy use.

Ofgem back billing rules: What you need to know

From 2007, Ofgem back billing rules state that energy suppliers can no longer try to reconcile incorrect domestic energy charges from more than 12 months ago, if the supplier itself is at fault for not billing the household correctly.

This is known as the Back-Billing Principle, and suppliers must adhere to it. It states:

"If your supplier is at fault, it will not seek additional payment for unbilled energy used more than 12 months prior to the error being detected and a corrected bill being issued."

Are there UK back billing laws?

There aren't official UK back billing laws, but there are rules the energy regulator, Ofgem, sets that suppliers have to follow.

Gas and electricity suppliers are not allowed to charge customers for energy used more than 12 months previously, if the billing error is the supplier’s fault. Despite this, it has been reported that some energy companies continue to send bills to former and current customers to recoup on their own internal billing errors. In the last few years, fines worth millions of pounds have been levied by Ofgem against energy suppliers for issues related to this so-called mis-billing (also referred to as "bad billing").

With energy bills continuing to trend higher due to market instability, it's more important than ever that you know how to resolve billing errors and ensure you’re not paying more for their energy than you need to.

Do I have to pay a back bill?

The Ofgem Back-Billing Principle as stated above applies to you and your energy bill if:

• Your supplier failed to bill you at all even though you have requested bills from it
• Your energy supplier billed you using estimated meter readings instead of valid readings provided by you or a meter reader
• Your supplier billed you incorrectly by mixing up meter readings, and failed to act upon information available to put this right
• Your supplier failed to do anything about a query or fault you have raised regarding your account or meter and subsequently allowed a large debt to build up on your account
• Your supplier failed to reassess a payment arrangement (e.g. a request to change your direct debit) within 15 months or failed to reassess based on a reasonable estimate.

The Back-Billing Principle does not apply to you and your bill if:

• You have been using the gas or electricity supply but have made no attempt to contact the supplier to arrange payment. This includes moving into a property and making no attempt to let a supplier know you are the new tenant or homeowner
• You have wilfully avoided payment
• You have not co-operated with attempts to obtain meter readings or resolve queries requested by the supplier. This includes failing to allow access to the property or failing to respond to requests for meter details or meter readings.

Why am I being charged for old energy usage?

There are several reasons why your supplier could have made errors in your energy billing.

Many households rely on estimated meter readings, instead of providing meter readings to their supplier regularly throughout the year. This can lead to customers underpaying - or even overpaying - their energy supplier. Poor internal processes could mean these underpayments are left unnoticed for months or years, hence a "back bill".

Usually, the billing errors are related to one-off mistakes specific to the customer’s situation. To avoid being overcharged on your energy, check out our dedicated guide. 

What's a back billing scenario?

A back billing scenario explains why you might have suddenly received a “catch-up” bill from your supplier. It basically provides a reason why you’ve been undercharged for your energy use.

One back billing scenario might go as follows:

1. Roger notices that his supplier is overcharging him on his direct debit each month, leading to an energy credit of hundreds sitting in his account. He calls customer service to get this energy credit refunded and request his direct debit amount be reviewed.
2. However, an internal mistake leads to his direct debit being cancelled entirely.
3. The cancelled direct debit goes unnoticed by both Roger and the supplier for months — until the supplier picks up on the mistake and sends Roger a bill for all the missed payments at once.

Common back-billing scenarios 

Other common scenarios that result in back-billing include:

• Bills based on estimated readings that are much lower than the household’s energy consumption. Once a meter reading is finally taken, the discrepancy results in your supplier sending you a back bill to cover the shortfall 
• Errors linked to the way suppliers access meter information and link it to customers’ addresses. For example, some households, especially flats in new-build properties, are charged under the wrong meter number because of addresses not corresponding to the energy meter numbers on file for them in the national database. This can take a lot of time and effort on the part of customers to sort out, especially if they've attempted to switch to another supplier

If you're moving into a new house and want to switch energy supplier, make sure the right meter numbers are registered to your new address before initiating a switch - otherwise you might have to deal with two energy suppliers rather than just one.

What do I do if my supplier has sent me an incorrect back bill?

1. Your first step if you have been incorrectly back-billed is to contact your energy supplier. You must follow its specific complaints-handling procedure.
2. If you have done so and still have not had the issue reconciled, you can move to the next step, which is to contact Citizens Advice on 08454 04 05 06 or at its website.
3. The third step is to enlist the help of the Energy Ombudsman.

There are procedures and rules that apply to when and how you should contact either the Ombudsman or Citizens Advice. Read our guide that details how to make a complaint about energy for step-by-step info on escalating your energy complaints.

How smart meters help prevent back billing with accurate readings

One of the best ways to avoid back-billing in future is to upgrade to a smart meter. Smart meters are designed to send regular meter readings to your supplier, making estimated meter readings a thing of a past. As a result, your supplier should have an up-to-date record of your energy consumption, meaning your bills are accurate and the risk of receiving an unexpected bill decreases.

Other ways to avoid being back-billed in the future include:

• Provide regular meter readings: don’t rely on estimated bills if you don’t have a smart meter. Note, if you have an older smart meter and switch supplier, there’s a chance the smart meter will no longer send automatic readings to your new supplier – if this is the case, you’ll need to provide regular readings yourself
• Check your bills carefully: make sure the meter readings given on your bill closely match those on your meter (allow for the fact the bill was based on previous consumption, so your meter readings will now likely be higher than those on the bill)
• Check your meter serial numbers: do they match those on the bill? If not, contact your supplier and let it know.