ScottishPower wrongly charging termination fee

masonic · 28 August 2013 at 9:04PM

Hi Folks,

Apologies in advance for the long post.

I've recently been in the unfortunate situation of having to negotiate a switch from ScottishPower as I reached the end of my Online Fixed Price Energy August 2013 deal. I'm very relieved to have done a search and found I am not alone in being unhappy with ScottishPower's procedures regarding cancellation fees. Here is a brief timeline of what has happened in my case so far:

17th June: Received the "Important information: your energy deal ends soon" email. This email states "If you notify us that you wish to change supplier before 1st August 2013 and if we receive a request for your supply from another supplier within 15 working days, we will not move you to our standard prices or apply a cancellation charge." - Note 15 WORKING days - important for later.

21st July: Contact ScottishPower using their online form to state that I intend to switch supplier at the end of my current deal and asking not to be moved to the standard prices.

23rd July: Receive a response stating "There is a cancellation charge of £30.64 for Electricity and £20.42 for Gas if we receive the notification of change of supply before 31 July 2013. Please notify us if you wish to invoke right to cancel on your account."

23rd July: Confused by this response, I reply, stating "To be clear, I do not wish to end my agreement early, but I do not wish to be moved onto standard prices at the end of my deal when I switch to a new supplier."

25th July: Received a response stating "...I have invoked your Right to Cancel. If we receive the notification from the new supplier within 15 working days regarding the transfer of supplier, we will not apply the cancellation fee and will not move the account on the standard tariff." - Again, note 15 WORKING days.

1st August: Receive notification from my new supplier (iSupply) entitled "NOTICE Successful registration of your supply point"

6th August: Receive "One last thing before you go" email from ScottishPower

(14th August: Date Scottishpower claim to have received notification from my new supplier regarding transfer of my supply - see below)
(15th August: Date my new supplier starts supplying my energy)

24th August: Notice new bill on my account with units charged at the standard prices. Send an email to query whether right to cancel was not invoked on my account.

28th August: Receive email from ScottishPower stating: "You may have received a previous email from us on 25 July 2013 regarding the notification from your new supplier within 15 days. But we have received the notification regarding the transfer of your supply on 14 August 2013 which is more than 15 days. Therefore the cancellation charges were applied and you were moved to standard service package."

The problem is, I don't believe ScottishPower's claim that they did not receive notification from my new supplier until 14th August and even if they did, 25th July-14th August is 14 WORKING days and therefore within the time frame quoted to me twice during the process. Applying a cancellation fee under such circumstances is baffling!! :mad:

Initially I tried to phone them, but gave up after waiting on hold for 30 minutes. I've contacted them online again with a complaint regarding this matter, asking for them to review their decision to charge me and asking for a small good will payment to be made in view of the difficulties I've had following through on this rather simple request.

Shame on ScottishPower for trying it on. I wonder how many times they get away with behaviour like this because people don't notice or don't have the energy to follow through. I don't like to part ways with a company on bad terms, but I have a very low opinion of this company right now.

dogshome · 29 August 2013 at 9:06AM

All very strange
SP's letter of 17th June seems to be confusing two different rules about supply contract endings

The 15 day notice period applies to *'Fixed' contracts when there is a price increase - With an "I'm going to Switch" notice to the supplier, the customer is entitled to remain on the old prices until the Switch takes place
* 'Fixed' term contacts where the price wasn't actually fixed, but tied to a % of the Standard tariff prices were once common and the above rule was brought in to protect customers

A normal 'Fixed' contract where the price per Kwh is fixed till the End Date has different rules.
The supplier is entitled to apply any fee's listed in the T&C's if the customer bails out early - SP quite rightly gave notice of the Contracts end, BUT if the customer then decides to Switch IT IS THE DATE THE SWITCH ACTUALLY TAKES PLACE that determines wether or not Exit Fee's should apply.

It must be understood that to escape exit fee's, any customer leaving at a Fixed contracts end will spend a short period on the old suppliers Standard tariff rates
However Masonics time-line shows that his Switch took place well after the End Date of the Fixed contract - He needs to WRITE a letter headed Complaint

DirectDebacle · 29 August 2013 at 12:16PM

Don't get hung up on the 15 day time scale. Your terms and conditions clearly state when cancellation charges apply, read them carefully. If you no longer have them they can be found from here . The wording is important and refers to 'if you cancel your Offer Product by switching...

This means if you are actually switched prior to 31/7/2013. The emails in your post refer to notification of you switching. Entirely different to the T&C's. SP simply receiving notification of an intention to switch is not in the T&C and therefore does not entitle them to apply cancellation charges.

The emails are (deliberately) mis-leading. The T&C's are clear on what happens at the end of the offer product. Either you choose another product, switch supplier or go on to the Standard Tariff.

You need to establish precisely the date the new supplier took over your supply. If before 31/7/13 then cancellation charges apply. If after they don't.

If after, the final bill should show any energy used charged at the Standard Tariff. Ensure this is the case and check you were not put onto another SP tariff that does carry cancellation charges.

As dogshome advises follow SP complaints procedure. Put a complaint in writing and send Recorded snail mail. Confirm it by email.

Have a look at this thread

http://forums.moneysavingexpert.com/showthread.php?t=4748936

Please follow the links in that thread and forward your complaint on to Consumer Futures and/or The Times to assist in their investigations.

masonic · 29 August 2013 at 6:16PM

Thanks for the comments and advice. I agree it doesn't seem like ScottishPower were under any obligation to offer me the 15 day notice period, but it was stated clearly in an official email from them (and restated by one of their advisers), so I believe it is fair and reasonable for them to uphold their end of the bargain even if it isn't required by the T&Cs. There is no indication so far that they are challenging the 15 day notice period itself. It seems that will come down to a dispute over whether it is 15 calendar days as they now maintain, or 15 working days as they told me twice by email previously.

In terms of whether a penalty charge can be applied, this is clear. I was moved onto their Standard Online tariff. This was stated to me by email and confirmed by my final bill. I have double checked and there are no early termination charges associated with that tariff. The new supplier took over my supply on the 15th August, so there is no doubt: I did not leave my previous product early.

I've already sent an email complaint, but as suggested I'll follow up with a physical letter and to those organisations mentioned in the thread above.

Thanks again.

DirectDebacle · 29 August 2013 at 8:15PM

Thanks for the further info.

The 17th June communication is confusing. It contradicts the T&C's re cancellation and is ambiguous. I think you could argue that in addition to having the cancellation fees refunded that also the energy used from 31/7/13 to when your new supplier took over should be charged at the Fixed Price Energy rate you were on.

This will be a small sum compared to the cancellation fees but nevertheless I understand your point of principle. Appears they have not adhered to the T&C's nor to what appears to have been promised on 17th June.

It might be helpful if one of the SP reps were to explain what the 17th June communication actually means and why you have been charged cancellation fees.

There seems no doubt from what you say that there is no justification in cancellation charges being applied in any event.

Good luck and please update when you have further info.

DirectDebacle · 1 September 2013 at 11:19AM

Another article on this shoddy practice published in The Times on Saturday.

masonic · 19 September 2013 at 7:46PM

I've had a couple of developments since sending in my complaint. I received a new bill in the post and an acknowledgement of my complaint 1 week ago today. The good news is no cancellation charges have been applied and they have backdated my final meter reading to the date my old tariff expired. However, they have applied standing charges at the Standard Online rate, where no standing charges applied in my expiring product. I was also promised an update by the Customer Care Team by today, which has not happened. I have sent them the following message:

I wish to follow up on the email I received on 12 September regarding my Electricity account under account reference XXXXXXXXXXX

I was informed on 12 September that I would be contacted within the following 5 working days with an update and/or resolution to my complaint. This deadline has now expired and I have received no communication from the Customer Care Team. I also believe that you have failed to act in accordance with your complaints procedure as I have not received a unique complaint reference number required by "Complaints Procedure - Level 2" of your "Handling Your Enquiry or Complaint - A ScottishPower Charter" document.

I am therefore unhappy with the way you are handling my complaint. I feel that I am being repeatedly let down by your customer services team.

Since you have been unable to provide me with an update, I shall provide you with an update of the situation from my perspective:

- I received the bill dated 11 September in which no cancellation fee was applied to my account. No consumption charges were applied during the period from 01/08/13-14/08/13, so these parts of my complaint have been resolved.
- However, I have been charged standing charges at the Standard Online tariff rate from 01/08/13-14/08/13 [£3.39-£0.18(Discount)+£0.16(VAT) = £3.37]. No standing charges apply to the Online Fixed Price Energy August 2013 tariff, so I require my account to be credited with £3.37 to cover this erroneous charge.
- I also request that you credit my account with a good will payment to compensate me for the time and effort I have so far put into trying to resolve this matter during the period between 26/07/13-19/09/13.
- Once my account has been credited as above, I require a refund of the credit balance of my account.
- I have still not received an explanation or apology for the communication I received from XXX XXXXX from your E-Contact Centre on 28/08/2013 who stated that you did not receive notification regarding the transfer of my supply within the required period (15 working days after 26 July) and also stated that cancellation charges would be applied to my account.
- I now request that you provide me with an explanation and/or apology for not contacting my within the timeframe stated in your message sent on 12/09/13.

Please note that I require a response from the Customer Care Team before the end of 26/09/13. If this is not possible I will require you to provide me with a final offer or letter of deadlock in accordance with "Complaints Procedure — Level 3 Escalation to Senior Management Team" of your charter.

masonic · 22 September 2013 at 2:15PM

Success. Today I received an email (complete with complaint number this time) giving me everything I requested in my previous email (apology, standing charges credited, £30 good will payment). Below I have posted some interesting excerpts which might be helpful to others who find themselves in a similar situation. My overall impression is that there is no clear policy followed by ScottishPower regarding switches to other suppliers, as can be seen by the contradictory statements made by different departments (inconsistent parts in bold):

1. Right to Cancel timelines and dates
a) Maturity email:

If you notify us that you wish to change supplier before 1st August 2013 and if we receive a request for your supply from another supplier within 15 working days, we will not move you to our standard prices or apply a cancellation charge.

b) Correspondence team:

You may have received a previous email from us on 25 July 2013 regarding the notification from your new supplier within 15 days. But we have received the notification regarding the transfer of your supply on 14 August 2013 which is more than 15 days. Therefore the cancellation charges were applied and you were moved to standard service package.

c) Customer Care team:

Within your maturity email I am sure you will have noted that the condition of this process is your chosen new supplier must contact ScottishPower within 15 working days from the date of your contact.

Our records show your new supplier duly contacted us on 2nd August 2013, to confirm their intentions to change your supply, which is well within the aforementioned window. Thus no cancellation fees were charged to your account up to your actual changeover date, of 14th August 2013.

2. Moving to Standard prices
a) Maturity email:

If you notify us that you wish to change supplier before 1st August 2013 and if we receive a request for your supply from another supplier within 15 working days, we will not move you to our standard prices or apply a cancellation charge.

b) Customer Care team:

As you know your Online Fixed Price Energy deal duly matured on 1st August 2013 and as such all accounts are moved onto our standard monthly direct debit prices from this date, unless of course, you had chosen a new energy deal with ScottishPower

.

DirectDebacle · 23 September 2013 at 9:27AM

You are not alone. Appears SP policy is to apply cancellation charges at any opportunity and if challenged will reverse them if inappropriayely applied.
Trouble is customers have to notice the 'error' and then be determined enough to jump through SP hoops as you were. Well done.

I'm not convinced SP are going to conduct an unbiased review of their procedures.

Extract from The Times last week:

Two readers who have had their cancellation penalties refunded are Joe Duggan, from York, and Anthony Barne, from Wiltshire. Both had been careful not to switch supplier until after their contracts had ended but this did not stop Scottish Power from hitting them with penalties.
However, after the intervention by Times Money, Scottish Power admitted that both had been wrongly penalised and they had their penalties refunded, with a goodwill payment thrown in.

Scottish Power’s complaints handlers say that Anthony’s charge had originally been applied “because we had been approached by your new supplier prior to your maturity date. However, in view of the fact that your supply did not actually leave us until after the maturity date we have credited the amount back to your account.”

This reinforces Consumer Futures’ suspicions that the penalties are being wrongly applied.

A Scottish Power spokesman says: “We indicated to Consumer Futures that we would undertake an extensive review of our cancellation charge procedures, following their initial contact last month. The cases of Mr Duggan and Mr Barne will be included in this review.”

DirectDebacle · 9 November 2013 at 8:16AM

Following complaints by MSE members to Consumer Futures and a campaign by The Times Scottish Power have been pressured into refunding some of their customers wrongly applied cancellation charges.

There have been several threads complaining of this practice by SP since 2010 and it was brought to the attention of Consumer Futures and The Times several months ago. SP Reps initially denied any wrongdoing in response to questions asked on here by members. More victims came forward following articles in The Times and under mounting pressure agreed to investigate themselves.

SP are now to refund around £250,000 to wrongly charged customers.

Extract from todays Times:

"Scottish Power, the UK’s fifth largest energy company, has this week admitted it wrongly imposed cancellation penalties on thousands of customers who were switching to another supplier. It will now pay out nearly £250,000 to those affected.
Scottish Power’s announcement marks a victory for Times Money’s three-month campaign to secure redress for the thousands of energy customers who were wrongly charged. With the help of dozens of Times readers we compiled a dossier of evidence that we sent to....."

Worth noting that despite repeated requests for Ofgem to step in and conduct a proper investigation, they sat on their hands and idly watched others do their job for them.

ScottishPower wrongly charging termination fee

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