What is back billing?

Sometimes your energy supplier recalculates your bill when it’s identified a problem or received a new meter reading that suggests estimated readings have been inaccurate.

The energy supplier works out what you should’ve paid based on the new information available and issues you with a new bill for any outstanding amount. This can sometimes result in you going into credit. But equally, you may find that you now owe money to the supplier.

The new bill you receive will go back in time to cover energy units that the supplier says you should’ve been charged for. But Ofgem back billing rules say the supplier can’t go back too far. This is known as ‘back billing’ or a ‘catch up bill’.

Energy suppliers must rely on estimated readings if they aren’t able to get an actual meter reading from you or your meter. This is standard practice and could be due to a number of reasons:

• As a result of the pandemic, many meters went unread for over two years – and in some cases, for quite some time after that.

• Some of the first generation of smart meters were faulty and had to be replaced, which led to some energy suppliers recalculating bills.

• The premises is vacant or inaccessible, so the supplier is unable to access the meter.

• Consumers have reported cases where the energy supplier’s computers appear to have rejected an actual meter reading, if it doesn’t seem to fit with the previous pattern of energy consumption.

This is why your bill might use estimates even though you have given actual readings, or your smart meter is transmitting the correct data.

The regulator Ofgem has strict rules about back billing. Back billing laws, which apply to domestic and microbusiness consumers, state:

• You can’t be ‘back billed’ for energy used or standing charges over 12 months ago unless you’ve been billed for the same amount previously.

• This means the maximum period you can be back billed for is one year back from the date on the new bill.

Ofgem’s rules add:

You can’t be charged for energy used more than 12 months ago if:

• You’ve not had an accurate bill for it before, even though you asked for one

• You’ve not been informed about any charges due via a statement of account before

• Your Direct Debit amount was previously set too low to cover any charges due

Consumers do have a responsibility to ensure that the energy supplier is able to obtain accurate meter readings. The Ofgem rules say:

The rules don’t apply if the consumer has acted unreasonably. Examples of ‘unreasonable behaviour’ may include stopping your supplier from billing you accurately, for example, by blocking access to your meter, ignoring requests for payment from your supplier or stealing electricity or gas.

Even though the regulator says back billing shouldn’t occur, many people have reported problems with recalculated bills that go back further than 12 months.

If you get a bill saying you owe more money because your energy use has been recalculated, you might be facing a back billing issue.

Steps to Take:

1. Check the Billing Dates

Look at the time period the bill covers. It might be split into different sections or show tariff changes. If it’s unclear, ask your energy supplier to explain how the bill was worked out.

2. Review the Amount Owed

• Look at the total amount due.

• Check the current date on the bill and the earliest date it covers.

• See if any deductions have been made.

• If the amount still seems too high, ask your supplier to review it.

3. Request a Breakdown

• Ask your supplier for a detailed breakdown showing meter readings and how they calculated the charges. This can help confirm if it’s a back bill.

4. Escalate if Needed

If the issue isn’t resolved within 8 weeks, or you get a “deadlock letter,” you can contact the Energy Ombudsman for a free, impartial review. Raise your dispute online here.