My electricity provider has recently revamped its invoice look to make it more reader friendly.
Which has highlighted an issue that I had not taken much notice of on it’s older invoices.
It involves a rounding adjustment on the total price calculations, usually a couple of cents.
Now I understand that if I was in a shop and paying cash and the cost of my items was either side of 5,10, 20 etc that it would be rounded up or down accordingly.
However I was of the belief that any EFT, direct debit transaction or other electronic payment would be the actual amount with no rounding.
My new invoice no longer shows the rounding figure but there is now a difference between the current invoice value and the total due value and this is where the rounding shows up. (or I think it is as it is not explained)
I contacted my supplier about the difference in value and there response was: “It is pretty common for most systems to round up in these instances”
As a business I deal with quite a few companies and have not come across this issue for electronic payments.
It is odd as the consumption charge is calculated from the product of two decimal numbers and so it must be rounded to dollars and cents already. Why round again after the service charge is added, which being the product of two integers, days and cents, is exact?
That is a very risky tactic and could end in grief.
If a bill in underpaid, even by a cent, it will be flagged as a non-payment/default and could be recorded against your credit record. It can also incur late payment fees or penalties such as losing any on time payment discounts (which will be more than the cent you are gaming with).
If you dispute a bill, even if it is a cent, you should take it up with the business before the payment due date. Taking it into your own hands (or trying to play games) will likely end in grief for you.
If the bill due date is yet to fall, I would be making an additional payment of $0.01 to ensure that you aren’t seen to default on the payment, are hit with late payment fees or lose any on time payment benefits.
I would be separately and directly raising the rounding adjustment with your energy provider if you have concerns.
‘Arguing’ with the customer service/complaint system is one thing but computers are, properly programmed, deterministic things that follow set rules with binary yes/no decisions at each step.
If it claims you owe $100 and receives $99.99 the test is whether your payment equals or exceeds what is owed, and if not whether you have some sort of dispensation or waiver on file. While it requires more than a single instance to report one to the credit system not all follow all rules all the time so whether you get a communication to pay up or whatever becomes a lotto. Once reported getting it undone can be frustratingly difficult and because everything is computer ‘driven’ the test of credit worthiness could be ‘are any delinquencies filed? yes/no’ with the respective outcomes for the consumer.
I have now included the parts of the invoice that are applicable to our discussion.
If you can find something in the debits and credits that accounts for the one cent difference then please highlight it for me.
What do you think I should pay from the info on the invoice?
Appreciate your concerns about my actions, however I have been in contact with the provider and their response was “It is pretty common for most systems to round up in these instances, Would it put your mind at ease if I applied a write-off of one cent?”
At no stage have they indicated that it the result of rounding up and as you can see from the invoice there is no rounding up in the debits or credits.
It may only be a cent but multiple that by 10,000 customers and it is no longer just a cent!
the number of cents ends in 1c or 2c, it is rounded down to 0. Example: $2.52 is rounded down to $2.50. If the number of cents ends in 3c or 4c, it is rounded up to the nearest 5c. Example: $7.63 is rounded up to $7.65.
From: https://www.skwirk.com.au ›
Seems that you’ve been told it’s a round up?
But I agree/sympathise with you, one cent from us adds up to lots of extra money for them
Would be interesting to be able to see how much rounding down happens
There is another possible answer and I only see it while keeping my own records and comparing with the invoices. Prices are internally kept to 4 decimals, eg $0.2950 per kwh or $0.5407 for membership. Base units are also odd numbers such as 119.59 and so on.
Using your invoice
119.59 * $0.3700 = $44.2483 not $44.24
0.31 * $0.2950 = $0.09145 not $0.09
34 * $0.5407 = $18.3838 not $18.38
34 * $1.3900 = $47.26
10 * $0.11 = $1.10
208.18 * $0.115 = $23.9407 not $23.94
171.01 * $0.062 = $10.60262 not $10.60
where most lines are fractionally more than what is shown. Rather than rounding each line up it is normal and reasonable to add them prior to rounding the tally.
All those fractions add up and what is printed as $74.24 is actually $74.34023 less the shown $0.09 writeoff (that could also have hidden decimals) makes it $74.25023. ($74.25)
But they may also have rounded separately at the debits and then at the the credits separately that would be $$109.98 - $35.64 = $74.34 less $0.09 writeoff = $74.25.
“However the Guideline clearly stated that where a consumer elected to pay by way of cheque, credit card or EFTPOS it was unnecessary for businesses to round the total value of the transaction….The ACCC is concerned by the continuing nature of these complaints, …”
Apparently few take any notice, although I’m not familiar with the guidelines for the Utilities, they seem to breath a more rarified air then the rest of us
Those suggesting that thousands of 1c differences will add up to a substantial amount are making assumptions about how rounding is done. The first and obvious assumption is that all the differences go in favour of the vendor which has not been demonstrated yet.
We can only assume on rounding down because we hear especially of rounding up? Any complains to the ACCC would be of that nature?
Re applying rounding on EFT transactions:
It might be that the ACCC guidelines by using the term ‘Uneccessary’
(not needed, optional, doesn’t have to be done…) have made it a bit ambiguous. Maybe: Unlawful… illegal…not permitted by law… would have been clearer…?
Agree, having looked at our bills.
It’s a question of precision. The “bill/invoice total” displayed is consistent with summing the line sub-totals after they have been rounded to the nearest cent. It’s how AGL present our bills.
There is no difference between the total due and summing the line sub-totals in any of the recent bills checked. Although keeping the extra precision of 5 decimals delivers differences of 1 or 2 cents. Sometimes to our favour. Sometimes to AGL’s benefit. IE AGL appear to drop the added precision available to avoid presenting any difference. Over many bills it in theory averages out.