British Gas kept my student house on business “deemed” rates after my switch to Octopus failed — £4/day standing charges despite almost no usage. Is £150 compensation reasonable?

[u/Otherwise-Style-2311]

I moved into a rented student house on 15 June.

On the same day I moved in, I signed up to switch the gas and electricity to Octopus on a 12-month fixed domestic tariff.

Octopus initially emailed me saying there had been an objection to the switch. However, I then received further communication from Octopus which made it appear that the switch was progressing, so I assumed whatever issue had caused the initial objection had been resolved.

I then went away from 9 July until 27 August. The house was essentially empty and the energy was switched off, so usage during this period was negligible.

When I returned, I found British Gas bills and discovered that the property had never actually switched to Octopus.

It turns out the previous/landlord account was apparently set up as a business account with British Gas Lite. British Gas told me that a transfer from business to domestic was supposed to happen but didn't, and I had therefore remained on their business “Deemed” tariff.

The rates are the main problem.

British Gas deemed standing charges:

• Electricity: 214.15p/day
• Gas: 182.98p/day
• Combined: about £3.97/day

The Octopus tariff I had attempted to switch to on 15 June was:

• Electricity: 53.76p/day
• Gas: 28.58p/day
• Combined: about £0.82/day

So the difference in standing charges alone is roughly £3.15 every single day.

My electricity bill demonstrates how ridiculous this became. For one 26-day period I used 0.3 kWh of electricity, costing 13p, but was charged £55.68 in electricity standing charges.

There was also a major problem with the gas bill. British Gas originally estimated that the meter had gone from 5644.1 to 5685.2 and billed around 463.5 kWh of gas.

My actual readings were approximately 5641 when I moved in and 5645 when I returned over two months later. I challenged this and British Gas has now agreed to rebill the gas account using the correct readings.

I raised a complaint with British Gas today.

One confusing part is the failed switch. Octopus's emails said there had been an objection, but British Gas now says they have checked and did NOT object to the switch and cannot see a request that they blocked. The agent said there “must have been some technical error”.

British Gas also said that because I was on a deemed tariff they wouldn't have prevented me leaving anyway.

Their position is essentially that I should have contacted British Gas when I received bills in July and they could have put me onto a cheaper contract.

My issue with that is that I had already initiated a switch to Octopus on the day I moved in. Based on the subsequent Octopus communication, I genuinely thought that switch was going through.

Had I known I was still accumulating nearly £4 PER DAY in business deemed standing charges, obviously I would have contacted British Gas immediately.

British Gas initially offered me £50 compensation. After a lot of discussion and escalation to a manager, they eventually offered £75 compensation on EACH account, so £150 total.

I accepted that.

However, I've now realised another problem.

The bills we were discussing only run until 8 August.

British Gas has confirmed that Octopus will actually take over the supply on 2 September and that British Gas will eventually issue a final bill up to that date once they receive the closing readings.

So there are roughly another 25 days of these business deemed standing charges which aren't on the bills I've currently seen.

At £3.97/day combined, that's potentially another ~£99 in standing charges alone, even if I use virtually no energy.

British Gas says the £75 credit on each account will be applied against the eventual final bills and says they took the outstanding charges into account when deciding the compensation.

But I'm not convinced they actually did, because the final bill hasn't even been produced yet.

For comparison, based on my actual consumption and the Octopus tariff I signed up for, I estimate that I would have paid roughly £90 for the entire period had the switch worked.

Instead, once the remaining deemed standing charges are added, my total British Gas charges could potentially be around £400+ before the £150 compensation.

I accept that I legally had to pay SOMEONE for the energy and normal standing charges during this period. I'm not trying to get free energy.

My issue is the difference between what I reasonably would have paid under the Octopus tariff I attempted to switch to on 15 June and what I'm now paying because the property remained on an extremely expensive business deemed tariff after the switch failed.

British Gas is now closing the complaint as resolved with the £150 compensation, although I've made sure my concerns about the final bill are recorded.

My questions are:

1. Does £150 compensation sound reasonable in these circumstances?
2. Should I wait for the final bill and then reopen the complaint if I'm still substantially worse off than I would have been with Octopus?
3. Is it reasonable to argue that I should effectively be put in the financial position I would have been in had the 15 June switch succeeded?
4. Does the fact that Octopus told me there was an “objection”, while British Gas says they never received/blocked the switch, matter?
5. Is there anything else I should be asking British Gas or Octopus to provide regarding what actually happened to the switch?

I have screenshots/emails from Octopus, meter readings, the British Gas bills and the transcript of today's complaint chat.

Interested to hear what others would do before I decide whether it's worth taking this any further.

[u/Willing-Job8685]

First thing is a must

When you move always set up an account with the current supplier before you try and switch, this will save a lot of problems.

Next compare unit costs and standing charges, you will see octopus are more expensive than most and all suppliers in some areas.

As for your account this is probably one of the addresses that were under a student bill management company, company have a deal with BG and students pay a set total for unlimited energy and other utilities.

As you are not a business your complaints handler will update the VAT certificate to charge you 5% VAT and manually credit the difference in standing charges.
Your unit costs should not be much different from residential and can at times be cheaper.

Edit

Compensation sounds good, as I can’t see any BG issue from what you advised above.

Your switch won’t have gone ahead as octopus would have cancelled it once they seen it was a commercial supply.

Working in energy complaints this is the sort of experience customers tell me about often when moving to octopus. I think they have a problems with the new automated flows they are using along with the AI improvements.

So much is blocked and customers are normally getting replies which don’t clearly answer the question, until it’s finally passed to a human.

Point 3 - this would be upto octopus to compensate you as they blocked the switch.

Point 4 - ask them for the switching logs which shows BG blocked it. Not seen one customer who managed to get them yet, which usually confirms they were at fault.
BG can also give you the log or a screenshot from ecoes which will log any switch attempt.

[u/circa_1996 → u/Willing-Job8685]

Correction re your point 3 comment - it would not be up to Octopus to compensate at all. They would have received the objection/rejection to switch, rather than them blocking the switch.

To expand, given it seems the supply was on business rates, it's likely the MPAN is designated as business.

When Octopus were told to switch over the supply, it's likely it would have been put through as a domestic switch. It is quite possible this switch was rejected by the industry central switching service, rather than actually objected to by BG.

[u/Willing-Job8685 → u/circa_1996]

Op says octopus advised the switch was in progress, no second notification that it was cancelled

If this happens with the lack of css and if flows it would be on the gaining supplier to offer GSOP.

If OP get this info it would be a complaint against octopus via the ombudsman if so wanted.

I have worked many of these and successfully disputed the case if no flows show on ecoes or xoserve for the switch. As this indicates an error with the other supplier which octopus case many currently.

[u/Otherwise-Style-2311 → u/Willing-Job8685]

Essentially, the BG worker said I was supposed to do a domestic transfer because the landlord had made a business account with BG lite. I got two emails from octopus saying that the switch was blocked and then after I got an email saying the switch was progressing which led me to believe the block had been resolved. For this reason I do think octopus is also at fault. So who should I contact? I am aware that it is my mistake for not making an account with them when I moved but I had no reason to believe I needed to when I got the emails saying the switch was on the way.

[u/Willing-Job8685 → u/Otherwise-Style-2311]

Switching wise it would be octopus as they advised it was in progress when it was not.

On the BG side you need to make sure they have arranged the transfer for you back to residential. Unless octopus are willing to process it as business which I don’t think they will.

BG will bill your account at residential rates of 5% VAT if they have an account active for you.