Why are Manx Gas increasing Direct Debits so significantly?
Unwarranted increases to a significant number of Manx Gas customers is a worrying sign for the Isle of Man, especially given the monopoly position the energy provider finds itself in.
At one point, Manx Gas were reported to have an significant surplus in customer funds due to overpayment through Direct Debits. Given the actions of the supplier of late, questions have to be asked as to why they are trying to increase monies held via overpayment?
This is in no way suggesting malpractice, it merely asks the question and one that an independant researcher should be able to easily corroborate.
So why would Manx Gas want to increase their stockpile of client cash?
Officially we don't know, but here are some thoughts as to why they might be doing so
Maximising Short-term Gains
The company may increase direct debit payments in order to show higher short-term gains. This could be driven by pressure from shareholders for increased revenue and could artificially inflate the company’s financial performance.
Cash Flow Improvement
Higher direct debit payments would translate to larger cash inflows for the company. This could improve the company's cash flow and its liquidity position, potentially allowing it to invest more freely or to cover debts/bills more easily.
Exploiting Customer Inertia
Some companies may bank on the fact that many customers don’t regularly check their bills or wouldn't bother changing providers for what could be perceived as a small increase. This lack of customer awareness and inertia can be exploited.
Unfair Price Discrimination
The company may apply higher charges to certain customers who they believe are less likely to notice or complain about the increases.
Given their willingness to cut off vunerable families, would it really come as a great shock if there were some nefarious reasoning for asking for (in some cases) vastly increased direct debit amounts? Despite these actions being seen as unethical and could damage the company's reputation, would it really matter if Manx Gas were found out? If discovered, the company should face backlash from customers but without any credible alternative won't lead to a loss of custom. Given the lack of appetite from the OFT to take potentially legal and regulatory consequences as well, and given their restructuring to more than just the Isle of Man, would it really be a great shock?