Woman's $107,000 Electric Bill Could Easily Have Been Avoided

utility bills, money down the drainHey, billing errors happen. We’ve all opened a utility bill and said, “This doesn’t seem right,” and 9 times out of 10, it’s all resolved with a quick phone call. Even when it’s an aquarium-sized water bill for a three-bedroom house.

But what if that billing error happened, and you’ve authorized electronic billing? If you’re like one Chicago-area family, you could end up overpaying by more than a hundred grand for a month’s worth of electricity.



This could happen with any company, of course, but in this story, the customer had just signed up for a new program that allowed her to save money by using real-time billing for electricity -- something businesses have been doing for years (timing their heavy use for off-peak hours). She thought, “Oh, cool! I can save money this way.”

And she probably will. But her excitement over the bill had a more immediate effect: It let her see, before the billing date, that she was about to be overbilled by, oh, about $107,400. The previous month, her bill was $276 and she used 2,236 kilowatt hours. The month in question, it was mistakenly thought that she had used 1.6 million kilowatt hours for a bill of $107,625.16. (Don’t forget the sixteen cents!)

The taxes and fees alone were more than $16,000!

Fortunately, she had a few days before the billing cycle took effect, so she was able to call, point out the problem, and have the bill corrected before she had her bank account and automatic overdraft protection gutted.

The lesson? If you’re going to do automatic anything, keep your eye on it. It’s great to have your bills paid on time with no effort on your part, but you still need to make a date to open the mailed copies and check the amounts. It’s too easy for mistakes to sneak through, and if they’re considerably smaller than this one -- which is a lot more likely! -- you might never catch them.

When I saw a financial adviser (who was more of a financial therapist), she actually suggested I not do any automatic billing and said I should keep my paper billing in place rather than switching to email. Her thinking was that if you have a stack of envelopes, you are more likely to put them in a folder and spend an evening looking them over. She also had me write each bill’s recurring due date on my calendar. That way, I wasn’t distanced from the bill-paying process.

Even if you stick with paperless billing and automatic bill-pay, it’s a good policy to print things out and watch the bottom line. At least for me and my money -- who have a stormy, rocky relationship rife with me often feeling abandoned! -- it’s sometimes the only thing keeping us together.

Has automatic bill-pay ever gotten you in trouble?


Image via taxbrackets.org

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