EON - Can they do this?

gordonstights

Basically I have a small business where I set up on a 12 month contract last October for a fixed price for electricity.

In July I received a letter from them saying it was a price review. The letter seemed like another flyer, nothing sinister about it, and I was off work during a period of illness but running the accounts side of things from home so I concentrated on paying bills and not letters which looked liked unimportant info.

So back to work in August I rang them about getting a better price and they said "too late, you should have told us in July after receiving that letter". I left it and was annoyed with myself for not reading the letter more carefully.

Then I rang them yesterday to query something and it came to light that when my contract ended on the 1st October, they had also signed me up for another year which they won't let me get out of.

Apparently in the same letter in July, it also had terms & conditions on the back that stated if I had to tell them between July & August if I didn't want my contract in October to renew, and if they hadn't heard anything from me I would be automatically signed up for another contract. :mad:

Can they do this? I am really angry that they can just do this without speaking to me and confirming that this is something I want.

Does anyone know if this happens to domestic customers as well, and if so should I just accept it?

Premier_2

You need to refer to their terms & conditions of supply.

What does it say about varying prices mid term? If it was a fixed 12 month price plan surely they can't increase the price mid term unless caused by something outside of their control (e.g. increase in VAT). But refer to your contract for details of exactly how they can increase prices.

Again refer to your t&cs regarding giving notice to terminate. It's a common clause in business gas/electricity supply contracts that they will automatically renew the contract for a further period unless given notice not to do so. A 2 month notice or more can typically be required; the exact notice period should be stated in your contract.

With regards domestic supply contracts, the supply contract is ongoing unless it is switched to an alternative supplier. A domestic contract typically allows any price increase at any time (assuming it is not a fixed/capped price contract), but the supplier must allow the contract to be effectively cancelled by the customer giving notice within 10 days of receiving advice of such price increase and then promply arranging a switch of supplier. In such circumstances the original price will apply until the supply is switched.

whatatwit

I am with Eon for commercial gas and it works the same way for me.
Actually compared to some companies, they are quite good in giving you enough time and info to either change or contact them.
Have you checked to see how the new price compares to other companies, you can't really compare to what you were paying last year, as there has been huge jumps.....my gas price has more than doubled :eek: per unit.

Incisor

gordonstights wrote: »

... Then I rang them yesterday to query something and it came to light that when my contract ended on the 1st October, they had also signed me up for another year which they won't let me get out of.

Apparently in the same letter in July, it also had terms & conditions on the back that stated if I had to tell them between July & August if I didn't want my contract in October to renew, and if they hadn't heard anything from me I would be automatically signed up for another contract. :mad:

Can they do this? ....

They can do it if it was in the T&Cs when you originally signed up. They cannot impose it in a letter after the contract was agreed. Over to you ....

sooclayton

Hi gordonstights, well I've been caught in exactly the same way; only I don't ever remember getting the letter from Eon in May. Seems that they renew by default and give the worst possible terms (by the looks of our shop electricity bill which has gone up by a third on the same period last year). Like you, I'm furious and even more distraught that Eon has a self regulatory ombudsman. When I wrote to them offering to take up their online contract for one year I was told that "It would make a mockery of our contract system" as the old contract had expired in May. I do not understand how these companies get away with this practice as we only have their word that they have sent out the magical letter after the contract has expired. I initially signed a contract with Powergen in 1996 but apparently this carries on ad nauseum until I manage to receive the letter from them and either negotiate new terms or switch suppliers.
I am now taking the matter up with the Energy Ombudsman service who have already told me that they are inundated with complaints of this nature. Surely it's time we went back to the old paper and signature method of signing up to a contract?
Good luck with your complaint.:(

Former_E.ON_Company_Representative:_Malc

Hi sooclayton

I am sorry you are unhappy with the renewal of your energy supply contract. Thought it might help if I briefly outline what happens with business accounts.

Business contracts for small and medium sized enterprises fall into two categories. Rolling or Fixed Term/Price contracts.

Rolling contracts are where there is no agreement between us and the user. They generally cover properties where we already supply when the business owner takes over responsibility. These arrangements can be cancelled at any time by giving 28 days notice by phone, letter, email or fax.

Where you enter into a Fixed Term/Price contract with us you agree to be supplied for a set period of time at an agreed price. These contracts usually run for one, two or three years.

Before the end of the contract there will be a review period. This gives you an opportunity to agree a price and terms to apply once the existing contract ends.

The review starts 120 days before the end of a contract. This is the earliest point when you can tell us you wish to end the contract.

We will write to you within the first 60 days with new terms. These will be valid for 21 days from the date of the letter.

During this 21 day window you can agree new terms or advise us you wish to end the contract once it expires. At this point you can also tell us you either want to change supplier or go on to a rolling contract at the end of the existing agreement.

The end of the 21 days is the last time you can tell us you wish to end the contract.

If you do not contact us during the review period the new Fixed Term/Price contract will automatically be activated from the last day of the existing agreement.

Should you decide to go on a Rolling Contract we will write to you confirming the prices which will apply following the end of your existing agreement.

Rolling contract prices are usually higher than the Fixed Term/Price agreements.

Please give our business people a call if you feel we have fallen down with any of the above. Your details and contact history will be on our systems. Ask for an explanation. Ask for a complaint to be raised if you are not satisfied with the explanation.

Hope this helps.

Malc

Mike_in_Horwich

Inertia selling.

It's a benefit for the seller to demand a response from the buyer. Works OK only if the letter is:

a) received by the buyer of the service
b) read and understood by the buyer

(b) above is down to the buyer......all letters from suppliers with whom you have a contract with really should be read.

(a) I have a serious issue with this though. How many have suffered "lost post" ? The supplier of the service can easily state that a "letter was sent to you on ...." but this is no guarantee that it arrived.

I believe inertia selling should be phased-out as it places too much benefit in the hands of the seller and little protection in the hands of the buyer.

stavrock_2

I am in the same situation with British Gas. Basically i entered into a 1 year contract with them in January 2008. I had notice about three months ago that my electricity and gas rates had almost tripled. When i phoned them, they informed me that i was too late because they sent me the new contact in October 2008 and i did not respond. This now means i am tied up for a further 2 years at the higher rate!!

I informed them that i had never received the contract (which i didn't) and they reply well we sent it you. I asked if they had any proof of postage to prove that i had been sent the letter and they said they did not have to provide proof of postage. Their system can prove that a contract was printed on the 3rd of October.

Ok i replied by saying i had sent notice requesting to leave and they said i had to provide proof of postage. I then asked for a copy of the contract and T&Cs so i could see my signature on it. He said you had a verbal contract conducted over the phone and i had not signed anything. I then told him that the operator did not mention that if i fail to cancel my 1 year contact i would automatically be signed up for another 2 years at a stupidly high rate.

He said no they would not have mentioned it but it's all in the T&C's. I feel agreeing T&C's over the phone is a con. I therefore asked for a copy of the T&C's to be sent and also a copy of the verbal contract. How do i even know that the T&C’s they send me were the same i agreed too?

It's a massive con to be allowed to automatically lock me into a contact for a further 2 years at a stupidly high rate. I have done a bit of research and found this to be a common problem amongst many small businesses. I feel if Gordon Brown really wants to help small businesses, he could start by sorting this out.