Money expert Martin Lewis has warned that energy providers are frequently breaking strict industry guidelines by demanding payments for power used more than 12 months ago, a practice known as backbilling. Speaking to MPs at the Public Accounts Committee, Lewis highlighted that many households are being hit with unexpected demands for hundreds of pounds over multiple years, despite legal protections in place to prevent this.
What is backbilling and why is it a problem?
Backbilling occurs when a supplier sends a bill for energy consumed more than 12 months prior. According to Ofgem's rules, domestic consumers and microbusinesses are not required to pay for energy used more than 12 months ago if they have not been told about the amount through a statement of account, if their Direct Debit was set too low, or if they have not received an accurate bill before. However, administrative failures, technical mistakes, and computer glitches mean companies regularly try to recoup lost revenue from unaware households rather than absorbing the cost of their own errors.
Lewis told the committee: "We have a host of problems over billing. Billing is incredibly complex, especially in the energy world. We have the issue that you cannot be backbilled for more than 12 months. I think Ofgem has been cracking down on that, but I am still regularly contacted by people who have had two years of backbilling."
Consumer protections and how to challenge backbilling
Citizens Advice states that suppliers "cannot usually send you a bill for energy you used more than 12 months ago." The backbilling rules do not apply if the supplier sent a bill before the year passed and the consumer did not pay; in that case, the supplier can still charge. The consumer watchdog advises writing an official letter to the customer service department, stating: "Tell them that you're protected by the back billing rules and should only be charged for 1 year's energy use." If the firm continues to demand payment, consumers should launch an official internal grievance, with full guidance available on the Citizens Advice website.
Lewis emphasized that many people are unaware of their rights: "If you do not know that you cannot be backbilled for over a year, you do not know that you can say, 'I'm not paying for more than a year because it was your fault.' There are technical rules – if you have behaved wrongly, it doesn't apply - but, effectively, if they have not billed you for two years and it is their fault, they cannot bill you for longer than 12 months. But people do still get billed. One would surely think that in this modern digital world something is systemically going wrong in the companies in the way that we do this."
Ofgem's role and ongoing issues
Ofgem, the UK energy regulator, has introduced strict consumer protections to prevent outdated demands, but technical failures persist. The underlying issue stems from failures within the administrative systems of major British utility providers. Lewis's comments come as households continue to struggle with confusing accounts and unexpected charges, despite regulatory efforts to crack down on backbilling.
