The legalities and moralities attached to “Refuse to pay”

I am sharing this in the hope that others will find the energy to add their 2 cents of knowhow and help us all get a clearer picture of what is really going on and who has the right to do what. Making your own decision without anyone pushing us is our right and our responsibility, but without understanding, we are lost.

What is “ Refuse to pay”?

In simple terms, as many as One million people already are preparing themselves to rebel against these enormous rises in their utility bills by refusing to pay the Direct Debit they have agreed via their bank in favour of their Utility supplier.

There two forms of “Refuse to pay” and we need to understand them clearly. As per usual the UK government is not telling the truth to worried utility customers like you and I and just in case you are in any doubt, withholding the truth gets people locked away just as regularly as telling an untruth. If you are responsible for telling the truth, there is just one way to do it. Tell the truth. They're not doing it.

How it used to be.

Once upon a time, our meter was read and a bill sent for what we’d consumed.
Soon after privatisation, the cost of reading meters was dropped outside of emergencies and we had most of the utilities estimating on the basis of past consumption or if that didn’t exist local consumption in that area. Many of them I personally consulted for, were using a module provided by the German firm SAP.
What that means is that a bill is not really a bill and an invoice is not an invoice. If you don’t agree with it you are duty bound to challenge it.
Obvious reasons I had in the past to challenge my bill and stop my Direct Debit were that I dumped my heating a few years ago before switching to these current suppliers and used a Japanese inversion heater instead of the storage heaters. I loved this type of comfortable heat and dramatically reduced my costs too. Bulb carried on stubbornly sending estimated bills and even threatening me when I lost my patience and stopped the Direct Debit, but they had to back down in the end because they were wrong.
In the middle of this dispute that I didn’t have time for, I used their methods to create a usage projection based on my actual usage rather than their estimates and agreed to pay that via standing order based on my spreadsheet. They still threatened me with disconnection, but I stuck it out.
If it had come to that, they couldn’t have achieved a warrant to disconnect without proving arrears and there were no arrears. I cant be certain that the law hasn’t changed in tis respect, so as I said before, get advice.

So what are they lying about and what truth are they holding back?

Most of us, for reasons I can’t explain, are not paying invoices for fuel used as we would have done in the past, but we are making a payment towards an estimated bill our utility companies say we will probably receive in the future, next Winter.
How did we get to this place? Well frankly I am baffled. My bill works like that too and yet I am so against being ripped off in this manner, but obviously I took my eye off the ball and didn’t fully read the huge contract at some point in the past. Indeed if I had read it, despite not being especially stupid, I probably couldn’t reasonably have been expected to spot the issue. The supplier is projecting a set price per unit in December to March and forcing us to save up money now while we have low consumption so that we don’t have to pay the £2–3000 bills they say we will face in the Winter period. I most likely found them to be cheaper than the others and didn’t read the small print.

Wait a minute!
Are you telling me? No I am not telling you that I agreed to a utility supplier to save my money because I wouldn’t have the ability to do so myself and then . . . .
Im not a child. I have savings accounts and they provide very high returns. Tell me to expect a big bill next Winter and Ill do this myself and do it very much more efficiently that Bulb, or British gas or any other huge rent-seeker. I have little doubt that you are perfectly capable of doing so too.
Of course if you leave, they promise to repay your built-up credit sum immediately. Like a credit union only not a union, not paying you for use of your capital and not on your side.
Then you have to trust them to do what they promised. But that’s an issue too, they never promised anything, all this sneaked up very secretively. I wouldn’t trust them, would you?
Somewhere behind all of this, our government must have secretly Ok’d this behaviour or surely they’d never have chanced it. That’s makes it even worse.

My supplier wrote a few days back to kindly tell me (not ask my permission) that they had totally revised my contract with them. I ran out of patience and popped a cork after 10 minutes, but I have little doubt there is an attempt in there to scare me off stopping my direct debit.

Why I will be stopping my direct debit.

I will be doing it again because my analysis of the gas market which is as good as the next in terms of both data and experience at such analysis, says that gas wholesale prices which also are the largest by far influence on Electricity prices are coming down nicely and there’s no reason unless governments are planning to create one, why gas prices shut shoot back up. That means that for my consumption, the amount I am paying now is more than enough and if I am proven wrong, I will pay more when that time comes. I’ll even put a little extra away for the tallyman just in case the prices “shoot” up again and I’ll get a nice little return on my savings unlike investing it in a Utility with no retrun and no security.

If at any time, I become convinced that gas prices are going to shoot up again, I will buy a few futures to hedge my position. By that I mean roughly that I’ll pay slightly above todays price now for delivery in December, Jan, Feb etc only instead of having to take delivery of barrels, I’ll sell my futures and use the profit to pay my bills and have a little left over.
Incidentally, the utility suppliers all run trading desks doing exactly this all the time and not only can they and do they, make a fortune out of guessing the markets correctly, they are using your capital and mine to fund their little gamble. It wouldn’t surprise anyone of they were funding the odd bomb to keep the payday going, but hopefully not.
All of these companies are showing huge profit increases, e.g. Centirca who owns British Gas is showing a near Five by increase in profits. It’s a similar story at most of the others. Don’t feel sorry for them and don’t feel sorry for a governmnt who would use you to this degree. And yes, they may be using this as a tool to fight inflation i.e. taking your money and giving it to their buddies in the oil and gas industry.

So what is a direct debit?

“A Direct Debit is an instruction from you to your bank, authorising someone to collect payments from your account when they are due. You give this authorisation by completing a Direct Debit Mandate form — this can be a paper form or a web page that you complete online.” More>>

Basic rules:

1. Advance notice — You must be told the amount and date of each payment in advance.

2. Direct Debit guarantee — You are entitled to an immediate refund for any payments that shouldn’t have been taken. ( Harder in practice than in theory)

The savings plan con.

Setting an amount in advance to “save up” in case of a price rise in future, is in my view a long way away from the basis on which such instruments were agreed and a long way away from the relationship I and you agreed with our utility companies who are not banks, not properly regulated or instituted to carry out such business and are bluntly; using customers to provide free capital for their enterprise. Many of these customers are barely able to feed their children after making their interest free loan to the Utility company.

The whole thing is an absurd con that no responsible government would ever allow to happen.

Snags with direct debits:
Vendors may offer an incentive to use them and this can become a grey area in terms of your basic rights, especially if they threaten to penalise you when you demand your basic rights.
In a scenario when it is very difficult for anyone to guess the amount in advance, the Direct Debit is rarely a suitable instrument and many would agree with me that in such cases it should be scrapped entirely.

Another snag is that unlike a bill or invoice, you don’t have to agree it and it does not have to be correct, you still are expected to pay it unless you stop the Direct debit.

What is an invoice or bill?

These are statements of how much you owe for the services or items supplied. Unless you have reason to contest the amount, it must be paid within the agreed terms. It is occasionally in advance but mostly in arrears. The key here is that the service and it’s cost is usually defined unless sometimes in the case of an advance payment.

Drect Debit V Standing Order.
It’s interesting how so many of these vendors moved rapidly to DDs and abandoned the use of Standing Orders or even refuse to entertain them. A standing order pays them a fixed amount monthly. The key to this is that you are in charge and if they need more money they must ask. A Direct Debit is an invitation to take your wallet and help themselves to however much they would like every month. They may or may not give the required warning and it probably ends up in spam filters anyhow. So why give a stranger so much power? And why accept threats and bullying if you do find they empty your account or simply ask for more than your have got.

If you don’t pay a standing order you are in most cases, deliberatley refusing to pay for a service or product you agreed to and most likely consumed and that looks remarkably like an attempt at fraud unless you have a good reason. You might just be broke through no fault of your own for example.
If you don’t pay a Direct Debit or cancel it while continuing to consume the service, that appears at first to be no different to the previous scenario because you entered a legal agreement with the vendor and now you are not appearing to meet your commitment, but if you offer to pay a reasonable amount via direct payment or via standing order because you disagree with the amount and you offer to pay any shortfalls on demand when they arise, then you are surely just exercising your right and indeed your duty.

Why is this Direct Debit immoral and being grossly misrepresented which in my view implies it must also be illegal in many situations.

Now I must state at this point that I am not a lawyer and I’m aware that morality and law don’t always play nicely together so if you want to be entirely sure about the rights and wrongs and inevitable maybes of this situation, you should ask a friendly lawyer.
Its very unlikely however, that the utilities or even the state can face down a million angry consumers and even the prospect of having to handle a million law-suits should be an issue.



Ed has enjoyed a dual career moving backwards and forwards between leadership roles in software engineering and transforming marketing functions.

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Edward Taaffe

Ed has enjoyed a dual career moving backwards and forwards between leadership roles in software engineering and transforming marketing functions.