I had this with npower a few years back.
Told them to sort it out (and refund £700) otherwise I was going to the Ombudsman.
Strangely, didn't have an issue after that.
Currently with Grittish Bass. May not be the cheapest, but their monthly "pay for what you use DD" scheme has been brilliant. I send in a monthly meter reading via the iPhone app, and we get charged for that amount.
I'm on the same setup, works brilliantly, no hassle arguing over DDs - when I went on meerkats etc it seemed that BG were the cheapest as well... I'd definitely only go with this sort of arrangement in the future.
My brother had the opposite problem to your npower one - Scottish power kept sending him combined
gas and electric bills for £3.21, £10.45 etc - he'd phone them up, give them meter readings and they'd promise to update their records and send a new bill, but they never did.
After 6 months he gave up and just paid the bills as they came in. 18 months later they sent a meter reader round, and then sent him a massive bill (£700+). He phones them up, tells them he's been trying to get them to bill him properly for ages, but they haven't, doesn't dispute he owes them the money, but that he can't afford to pay the the bill in one go. They go off, check their records, call him back and ask him what rate he can afford to pay it off at - for a laugh he says £10 a week, which they accept! Was the best part of 2 years before his account was even again