Exit Fees on Headline Grabbing Tariffs - A worrying trend?

Joyful

With Websaver the Customer has been getting cheaper energy so I still stand by my last paragraph. Next year I will be doing just that.

I would do my sums to see if I have saved more than the exit fee and also what I may save on the next tariff. If I have saved enough I would pay to change. Many of the variable tariffs are charging a % under the normal rate. I would say you can't have it both ways.

1carminestocky

Joyful wrote: »

With Websaver the Customer has been getting cheaper energy so I still stand by my last paragraph. Next year I will be doing just that.

I would do my sums to see if I have saved more than the exit fee and also what I may save on the next tariff. If I have saved enough I would pay to change. Many of the variable tariffs are charging a % under the normal rate. I would say you can't have it both ways.

Certainly in my area BG is now soundly beaten on the switching sites (but from what Cardew states I'm not sure we can totally trust them!) by EDF at the very least. If I was with websaver 3 or 4, why should I pay a penalty to go to a cheaper supplier? Like I stated before, they are anti-competitive.

Joyful

If a person feels that way they should stick to a standard tariff with no cancellation charges. Otherwise if the discounted fuel is accepted they should accept a charge if deciding to leave this tariff earlier than the contract signed up for. There is nothing anti competitive with that. The companies do not force you to sign up. It's called free will.

Cardew

I think we are getting away from the OP's point.

IMO

1. Exit penalties are justified on fixed price tariffs.

2. Exit penalties for a set time, are justified in order to prevent 'tarts' continually switching to other companies for the cashback.

3. Exit penalties for non-fixed tariffs are not justified for move of tariff within the same company - as long as it is done through the company and thus no cashback.

4. The main reason IMO for internet tariffs is that they are cheaper for the company to administer and thus a discount on the standard tariff is given. So for example someone who wishes to change from BG websaver 3 to websaver 4 should not have to pay an exit fee.

MarkyMarkD

I think you should draw a parallel between discounted rate mortgages and the BG websaver deals.

In both cases, the customer is getting a saving on the standard rate.

In both cases, it costs the lender/BG something to get a new customer (advertising cost/commission/procuration fee).

In both cases, the customer is tied in for a period of time in order to make the set-up costs for the provider worthwhile to them.

I don't see that any of this is unfair.

Just because a mortgage lender launches a cheaper discounted rate, doesn't mean that their existing borrowers on a tie-in should be able to switch without penalty. That is not how it works. Similarly, there is no logic in saying it's wrong for BG to charge the penalty if you seek to switch deals half-way through the tie-in period.

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Declaration of interest: I am on BG Websaver 3 and only signed up to it about a week before Websaver 4 was introduced. I will be switching (or leaving BG) in December 2009.

alared

MarkyMarkD wrote: »

Declaration of interest: I am on BG Websaver 3 and only signed up to it about a week before Websaver 4 was introduced. I will be switching (or leaving BG) in December 2009.

The way BG carry on you`ll probably be switching to Websaver 9 by December!

Cardew

MarkyMarkD wrote: »

Declaration of interest: I am on BG Websaver 3 and only signed up to it about a week before Websaver 4 was introduced. I will be switching (or leaving BG) in December 2009.

MMD,
Do you think BG would waive the exit penalty and let you switch to Websaver 4 if they thought you were going to pay the penalty and move to another company?

Worth a try?

1carminestocky

Why should you actually have to play these 'games', though? It's ridiculous. They are treating their loyal customers with total contempt.

alared

Lets not get too carried away here.
The difference between W3 and W4 is a fraction of a pence per unit.
All the hoo ha and fuss BG are making you`d think they had actually made a decent size cut.

I have to gree with the majority of posters that any cut should be automatically offered to their existing customers without any penalties attached.

Remember that at one time EVERY household was stuck with them.
Since the shackles were untied, BG have managed to lose MILLIONS of customers and still continue to do so.

MarkyMarkD

I don't see, cardew, why BG should respond to threats by giving you what you want. They will make enough money out of the exit penalty, surely, to justify letting you walk? There is no point having penalties if you waive them willy-nilly.

I still don't see it carmine's way, either. There's nothing contemptuous in requiring people to stick to the terms of a deal they freely enter into - it works both ways, after all. If Websaver 4 was MORE expensive than Websaver 3, should BG be able to force people onto the new tariff?

Of course not.