MSE News: British Gas locks thousands into expensive tariffs

edited 17 February 2010 at 12:07PM in Energy
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Former_MSE_GuyFormer_MSE_Guy Former MSE
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edited 17 February 2010 at 12:07PM in Energy
This is the discussion thread for the following MSE News Story:

"British Gas (BG) is locking thousands of customers whose fixed or capped deal has expired onto expensive new tariffs ..."

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This thread is to discuss the news story and to report fee refund successes. Also see the original thread which this story was based on.
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  • davidgmmafandavidgmmafan Forumite
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    "Yet crucially these tariffs have exit penalties, so people are people locked into tariffs they haven't signed up for and can't escape without paying a fee of up to £70."

    What if people are on holiday or live abroad for some of the year? I'm not even sure this was legal, can you really take silence as consent?
    Mixed Martial Arts is the greatest sport known to mankind and anyone who says it is 'a bar room brawl' has never trained in it and has no idea what they are talking about.
  • FYI

    Not a refund but it is very difficult moving from quarterly bills paid by cheque/over the phone by card to capped tariffs paid by direct debit in my experience.

    I switched to British Gas dual fuel direct debit online paperless billing Price Protect April 2009 in July 2008. 18 months later I still have no accurate bills.

    Fortunately I kept the confirmation letters of the April 2009 tariff I had signed up for because BG had actually put me on standard tariff . When I queried this it agreed to correct my tariff and back date it but had not done so by the time the tariff expired. By then it was impossible to produce an automated bill as it was no longer a current tariff. I was told it would be produced manually and on the promise of accurate bills I agreed to go onto Web Saver 3 and stay with BG!

    Last week I cancelled my direct debit due to switching bank accounts and received letters from BG for gas and electricity confirming my payment scheme had been cancelled and that I had a credit of £1,000 plus across the two accounts which of course is not the case since this represents 18 months in which BG is yet to actually bill me. I have been logging into my account online to give meter readings and receive what is called a bill by email every month but apparrently these are not actually bills.

    When I rang last week to give new bank details I was told I was on standard tariff - same argument and BG accepted I should have been on Web Saver 3. It said I had been put on Web Saver 3 but then manually two weeks later my tariff had changed back to standard. As Web Saver 6 was now available Web Saver 3 was no longer a current tariff so unfortuantely they could not produce an automated bill but would produce one manually and did I want to switch to Web Saver 6.

    I decided that before proceeding further with BG I would write to the complaints department which I have done so.

    Once I have accurate bills I think I am going back to quarterly bills and paying by cheque/card and focussing on cutting the energy I use rather than any saving that might be available from direct debit.

    Good luck with your representations to Ofgem.
  • "Yet crucially these tariffs have exit penalties, so people are people locked into tariffs they haven't signed up for and can't escape without paying a fee of up to £70."

    What if people are on holiday or live abroad for some of the year? I'm not even sure this was legal, can you really take silence as consent?

    Good point about the consent issue. In order to make a contract you must expressly agree to it's terms plus in every other field consent cannot be given by silence usually it must be expressly given unless that is impossible which is not the case here. For example you must consent to medical procedures, sign contracts with banks and insurance etc. Also once a contract has been agreed you cannot change it's terms unless both parties agree. I don't see how this can be legal.
  • CardewCardew Forumite
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    Good point about the consent issue. In order to make a contract you must expressly agree to it's terms plus in every other field consent cannot be given by silence usually it must be expressly given unless that is impossible which is not the case here. For example you must consent to medical procedures, sign contracts with banks and insurance etc. Also once a contract has been agreed you cannot change it's terms unless both parties agree. I don't see how this can be legal.

    I don't think it is that simple!

    Gas and electricity supply are governened by Acts of Parliament - the Gas and Electricity Acts.

    Nobody signs a contract these days. When you move into a property, the moment you use any gas and electricity you are bound by a legally binding deeemed contract, and that contradicts completely the point you are making above(in bold)

    Obviously BG, and the other companies that have adopted that practice, are morally wrong to put you on a contract that has a penalty clause for leaving early.

    However your argument would apply to any tariff BG placed you on at the end of your fixed price contract.

    It seems to me that BG should take one of three options if the customer takes no action at the end of their fixed tariff.

    Place the customer on a deemed contract tariff(which is the most expensive by far), a standard tariff or cut off supplies.
  • Yes but if you move into a property you only receive the fuel immediately for convenience purposes, you are free to change suppliers without penalty they cannot make you stay or charge you for leaving which is the issue here and if nobody signs an energy contract with their supplier anymore how come I have one?
  • MarkyMarkDMarkyMarkD Forumite
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    There is nothing legally or morally wrong with a contract which provides for one period at a particular fixed rate, and then another period at another fixed rate. Having tie-ins on both parts of the contract isn't morally or legally wrong either.

    This is not different to - say - a fixed rate mortgage, reverting to standard variable rate, with an early repayment charge which goes on into the SVR period. Regular practice a few years ago, and entirely legal and enforceable.

    So this is rather a misguided campaign.

    As with most things like this it boils down to:

    - use a calendar to note your contract exit points; and
    - take action when required.

    Simple.
  • JoyfulJoyful Forumite
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    Well said MarkyMarkD.
    I have a special deal for my Energy, Mobile, Landline, car and house insurance! Almost all advised at the time that it was a rolling contract which meant they would sign me up again for 12 months at their standard rates. It is up to me to renegotiate before each deal comes to an end. If you take a deal you have to read the conditions attached to it.

    Perhaps the correct thing would be for energy supplies to drop back to the standard rates but I'm sure there would be an outcry over that also with people saying they were not told this!
    Self Employed, Running my Dream Jobs
  • CardewCardew Forumite
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    The biggest take up of a fixed tariff was for BG PP2010 that started in 2005 and finishes on April 30 2010.

    It will be interesting to see if BG adopt the same tactics after the criticism they have attracted.

    To my mind the only ethical procedure would be to place customers on their Standard tariff if they haven't responded to the notice telling them their tariff is to end.
  • Saw this thread and thought I'd check my business renewal that's just come in from BG for my electric.

    It's headed "Protect your new contract prices for 2 years and you don't have to do a thing" so you tend to assume that it will just renew at the current prices - nowhere does it say that they are going up.

    I rang them up to check on my current prices and these were the results;
    Current Standing charge - 38.12p per day, NEW - 62.62p per day
    Current Unit Charge - 8.33p/kWh, NEW 14.87p/kWh

    What a bunch of crooks! Needless to say they offered me a better deal over the phone (although still an increase) but I'm going to shop around.
  • MikkiMikki Forumite
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    The point I think some people are missing is that people have NOT been notified, either by post, e-mail, or in the terms of the original contract they signed, that when the original tarrif ended they were automatically rolled onto a new (more expensive!) capped tarrif with exit fees.

    However, I'm glad to see that British Gas have so many happy employees who are happy to help their customers, and who are so well versed in their contracts! ;):whistle:
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