Is this a misselling from Eon?

ahkleung

Like others on this forum, my current capped tariff is also coming to an end on the 1st Oct and I got a letter from EOn "informing" me they are going to move my tariff to another capped tariff on 1st Oct.

After studying the small prints, I am beginning to wonder about their business practise and wonder if anyone else here got experiences on similiar situations.

1. As EOn mentioned in the letter, the new capped tariff they are putting me onto is £2 (will further question this figure later on) more than a standard variable tariff. Is this legal / within their code of practise to move people to a more expensive tariff than the standard variable tariff without their explicit consent?

2. After further digging on EOn own website, I found the capped tariff they are selling me are in fact the more expensive than everything else available on their site ignoring perphaps an extra 5mth cap period (one they selling end in May 2011 whereas the ones on their website finish at Dec 2010 max).

Surely, this practise is unacceptable, or how these companies work?

Some quick number crunching reveals the extra £2 cost from the tariff is subject to so many unrealistic assumptions, that it is completely misleading.

3. First, this £2 figure is comparing against their standard variable. Why on earth are they comparing against the std var tariff when (a) I am not on a std var tariff but a capped tariff and (b) they have no plan to put me on a vanilla std var tariff when my current capped rate expires?

This looks to me as a delibrate attempt to understate the extra cost involve, or am I wrong yet again?

4. Then, hidden in the small prints is more ridiculous assumptions. This time it is assumed I use only 3300kWh a year.

I know it has to make certain assumptions on this, but having received another letter on the same day "informing" me they will increase my monthly direct debit amount because I am apparently using 12,000kWh a year, is this not just ridiculous?

Maybe I have overreacted, but there are some serious mispresentation and perphaps misselling going on here, isn't it?

Guess I could have kept quiet and switch my tariff to a more reasonable one when my current deal expires.

Anyone on the same boat as me and not too pleased with this sort of practise?

Simon_Wallace

Yes, they're quite clearly at it.

Yes, I took out a capped rate from E.On last July.

No, I won't be an E.On customer come the first of October.

Is it legally misselling? Probably not.

Is it the same old, same old from a large company who hope you don't notice the increase and can't be bothered to change (see also car insurance renewals, mortgage SVRs etc).

Well done for pointing it out, time to leave E.On in droves folks. I see Scottish Power are doing £62 quidco at the mo. British Gas are doing £40, but there isn't a bargepole in existence long enough I could touch them with.

Cheers
Simon

brewerdave

SP are doing the same to customers whose fixed deal ends 31st August.The plan they are rolling you over onto(unless you opt out) is about 14% more expensive (for me anyway) than the plan finishing.
I'm moving on....

E.ON_Company_Representative:_Helena

HI ahkleung,

I am sorry that you are unhappy with the change of tariff’s.

I don't think it's a case of miss selling, as you don't have to change on to the recommended tariff, but you do need to change on to a tariff when yours ends, otherwise we can not bill you, as your current tariff is capped, this is the reason for being offered the version of this.

When a capped tariff ends, the account is changed on to a new version of those prices, these prices are normally higher as you will have capped some time ago when the prices were less.

You don’t have to change on to another capped price, you can use the comparison sites or website to look at alternatives and you can then change your prices online or by giving us a call.

Capped tariffs are normally a bit more than a standard tariff, it is known as paying a premium for having protected prices. This can even out if the prices rise and you have capped as you won’t be affected, also if the prices decrease your prices will decrease as well.

Your Direct Debit needs to cover the amount of energy that you use, is your account billed to accurate readings?

The 3300kWh a year is an average that Ofgem use, this information is used by all suppliers and is just an average.

You don’t need to keep quiet about the prices, you can just ask what would be better for you, if you do want to cap the prices again, there may not be many tariff’s available but if you don’t want to cap you can choose what would be best for you.

Helena

ahkleung

Hi Helena,

Understood that you will need to move me on some tariff once my cap period is over and also understood the price will change once the cap has expired.

But what I don't understand is the recommended tariff is more expensive to all other capped tariff currently advertised on your own company website.

Also interesting that you are calling it "the recommended tariff", I assume there is some sound reasons behind the recommendation. Can you elborate on what basis a recommendation to a customer is formed?

Another question I have is, how do I get hold of the latest T&C on a particular tariff that is no longer open to new subscription (i.e. my expiring cap)? Is this possible at all?

Thanks,
Ant

Colin_London

This sounds like the equivalent of a bank moving your savings into a 0.1% interest account when your 12 month promotional period is up, when in fact they have many better accounts available.

I too am on the fixed tariff that ends on October 1st. Now thanks to this site and checking on alternatives (EON and otherwise) I will be making sure I change to the best deal on or before that date.

If EON are putting customers who don't have this knowledge onto a tariff that is worse than the best currently available EON fixed price tariff (i.e. Fixonline 3) then how can they possibly 'recommend' it as the best deal???

Receiving letters worded like that, there will of course be some people who really trust EON that they are being put on the best currently available deal, when they are probably not.

Money_Maker_Shaker

I also got the letter, it's the way it's worded that really gets my back up.

Like others I'm going to be seriously looking around now to switch providers and will head back to read Martin's articles again. But as a quick pointer if Fixonline 3 is the current best EON deal are their many other providers beating this at the moment?

E.ON_Company_Representative:_Helena

Hi Ant,

The only capped tariff on the website at the moment is the Energy Saver 9, as you know all of the unit prices do vary depending on area.

It looks like this would be slightly cheaper than what you have been offered as the Energy Saver 9 prices are only capped until 2010 and the one you have been offered ends in 2011.

When customers change on to a capped tariff, most do understand that the unit prices are higher, as they are paying a premium to be protected against prices increases, the capped 2011 tariff is offering this protection for even longer.

It's not that we are trying to recommend the most expensive, we are offering the capped tariff that lasts the longest, as we feel you may want to protect your prices again for the future.

Which ever tariff we change you on to after a capped deal ends, there will always be some customers that are happy with this and some that are not, as tariffs are better for some and not others, this is the reason that you can change to any prices you feel would be better for you.

You could change on to the Energy Saver 9 instead, if you feel this would be better for you, or even any of the other tariffs.

You can just ask us for your current T&C's and we can send them to you.

Helena

Colin_London

Helena,

You say that EON 'are offering the capped tariff that lasts the longest, as we feel you may want to protect your prices again for the future.'

Could you explain why you 'feel' that, when EON know full well that wholesale energy prices, particularly for gas, are dropping through the floor:

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/6100536/A-new-age-of-cheap-energy-approaches.html

The usual excuse is that 'we in sales never know what the management are planning next'; a very handy denial!

It would be much more honest to say to customers coming off a fixed deal 'you are reverting to our standard tariff, but please contact us to find out about our full range of available offers'. In fact, you cannot say that customers would find this unfair, as this is exactly what EON say they would do in Section 17 of the Price Protection T's & C's if Price Protection is 'withdrawn'. So why do anything different at the end of the fixed period... unless of course there is a perceived advantage to EON in getting people onto another fixed deal of course.

You are by inertia putting people onto a new uncompetitive fixed tariff that you know is about to become much more uncompetitive, and hoping that a proportion of people won't notice that they are losing out.

I have just noted that you are now restricting your best tariffs to new customers. Therefore you are leaving me with no choice but to leave EON before 1st October :mad:

E.ON_Company_Representative:_Helena

Hi Colin,

We are offering a capped tariff as this is the same as the customer had previously chosen.

Remember, a capped tariff is not fixed, so if the unit prices do drop as you have said in your post, the unit prices for the capped tariff will drop as well.

I understand your point about changing customers on to a standard prices after their deals have ended, this is something I can put forward for you, we are grateful to receive our customers feedback.

Some customers may want the new capped prices and some may not, there is the choice to pick another tariff if they would like to.

Helena

cjw

I have had the same letter as you from E-On informing me my cap deal is coming to an end and they will be moving me to a new capped tarrif until 2011. They say in the letter that it will only be a 5.5% increase to what I am paying now, but it isn't. It works out at a 10.6% increase, because their 5.5% is based on their current standard prices and not my capped prices.

VERY MISLEADING and they have admitted this on the phone!

I'M MOVING AWAY FROM E-ON SOON