Need help getting out of rolling contract

sswats

Last october British gas automatically put our company on a rolling contract for 2 years at extortionate rates. We're a company with 6 employees, and we're paying almost £300 a month more than we were quoted from EDF.
We've been trying to get out of it but British gas refuse totally.

There is a section in Terms and conditions on cancelling the contract early but its all gobbledegook to me, so if someone can please help me with it. I understand theres a fee to pay, around £800 we calculated, which is a hell of a lot better than sticking with £300 extra a month for 17 months
Here is the relevent sections word for word.

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14. Renewing or ending the Fixed term

The following terms will apply to each fixed-term site.
14.1At the end of the initial period, the fixed-term will be
automatically extended for that site for one year or
for any other time we tell you about. This is called the
'renewal period'.
a The renewal period will begin the day after the initial period ends.
b The same terms and conditions and charges will apply to the site in the renewal period unless we tell you that they have changed.
c If the terms and conditions or the charges are due to change in the renewal period, we will let you know in writing at least 120 days before the end of the initial period or renewal period.
d If you do not want to accept the new terms and conditions or charges, you must end the contract in relation to that site in line with clause 14.2 below.
14.2You may end this contract for any site at the end of the initial period or renewal period by giving us notice in writing in line with clause 13.4, at least 90 days but not more than 120 days before the end of the initial period or renewal period for that site.
14.3When you have given us notice, we can negotiate new contract details for that site or you can choose a new supplier to take over your supply when the initial period or renewal period ends.
14.4In the following circumstances we are entitled to charge you higher prices from the date this contract ends.
If you have not changed supplier or agreed new contract details with us for any site once this contract ends.
b If we end this contract under clause 10.5b or d or because there is a problem with your credit score (see clause 2.4a).
If we charge higher prices in this way, this contract will still apply. But, clauses 7.6a, b, e and f will not apply. You will be able to end this contract for that site if you keep to clause 10. We have the right to switch the site to a fixed-term site by giving you written notice at any time if you have not kept to clause 10.



15.1[FONT=&quot]If you agree to transfer the supply at the [/FONT][FONT=&quot]site [/FONT][FONT=&quot]to another supplier, and you have not ended your [/FONT][FONT=&quot]contract [/FONT][FONT=&quot]with us at that [/FONT][FONT=&quot]site [/FONT][FONT=&quot]in line with clause 14.2, if we ask you to, you must help us to object to the other supplier about the transfer, by contacting them and explaining that you have not ended the [/FONT][FONT=&quot]contract [/FONT][FONT=&quot]with us.[/FONT]
15.2[FONT=&quot]If you transfer to another supplier when you have not kept to clause 14.2 or clause 15.1, then:[/FONT]
[FONT=&quot]a [/FONT][FONT=&quot]the [/FONT][FONT=&quot]contract [/FONT][FONT=&quot]will continue to apply, and you will be responsible for any [/FONT][FONT=&quot]charges [/FONT][FONT=&quot]or payments under it unless we agree otherwise; and[/FONT]
[FONT=&quot]b we may charge you a fee, which you must pay at least 10 days before the supply transfers. We work out the fee in the following way.[/FONT]
[FONT=&quot]Fee for ending the [/FONT][FONT=&quot]contract [/FONT][FONT=&quot]= £100 + (a x b)[/FONT]
■[FONT=&quot]£100 is our administration fee.[/FONT]
■[FONT=&quot]For gas, a is 0.00205.[/FONT]
■[FONT=&quot]For electricity, a depends on your [/FONT][FONT=&quot]meter.[/FONT]
[FONT=&quot]If you have a [/FONT][FONT=&quot]meter [/FONT][FONT=&quot]that is [/FONT][FONT=&quot]profile [/FONT][FONT=&quot]1, 2 or 3, a is 0.0081.[/FONT]
[FONT=&quot]If your [/FONT][FONT=&quot]meter [/FONT][FONT=&quot]is [/FONT][FONT=&quot]profile [/FONT][FONT=&quot]4, a is 0.0054.[/FONT]
[FONT=&quot]If your [/FONT][FONT=&quot]meter [/FONT][FONT=&quot]is [/FONT][FONT=&quot]profile [/FONT][FONT=&quot]5, a is 0.0061.[/FONT]
[FONT=&quot]If your [/FONT][FONT=&quot]meter [/FONT][FONT=&quot]is [/FONT][FONT=&quot]profile [/FONT][FONT=&quot]6, a is 0.0042.[/FONT]
[FONT=&quot]If your [/FONT][FONT=&quot]meter [/FONT][FONT=&quot]is [/FONT][FONT=&quot]profile [/FONT][FONT=&quot]7, a is 0.004.[/FONT]
[FONT=&quot]If your [/FONT][FONT=&quot]meter [/FONT][FONT=&quot]is [/FONT][FONT=&quot]profile [/FONT][FONT=&quot]8, a is 0.0047.[/FONT]
[FONT=&quot]■[/FONT][FONT=&quot]b is the amount of gas or electricity, in kilowatt hours and based on our estimate (which is final), that you would have bought from us if we had supplied it for the whole of the [/FONT][FONT=&quot]initial period [/FONT][FONT=&quot]or [/FONT][FONT=&quot]renewal period [/FONT][FONT=&quot](whichever applies).[/FONT]

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spiro

If I have read it correctly under 15.2a they can charge you for everything they would have charged you had you remained a customer plus under 15.2b they can charge you a penalty on top which is based on your estimated consumption over the next 17 months. The payment under 15.2b has been be paid 10 days before you change supplier otherwise I suspect they will object to the transfer on the grounds of contract and debt.

sswats

You serious?
Thats just ridiculous. I thought it I would just have to pay the fine which at £800 or so is ridiculous enough.

Are there any laws or regulations against roll over contracts.

Actually let me tell the full story.
On october 2008 we signed a contract with a company called E4business. These guys then went bust within 3 months and British gas took over the contract.

So we've never actually signed a contract with British gas. In october 2009 we tried to sign a new contract with EDF thinking BG contract had finished but were denied by BG and were forced to stay on the roll over contract for 2 more years. Despite us never signing a contract with BG initially.

BG say they dispatched a letter 120 days before the renewal date telling us to respond 30 days before renewal date if we wanted to stop the contract. Which we did, but we made a massive mistake, which is what got us in this mess, and we ignored it.

Do we have any case for complaint against BG?

JasX

probably depends on whether you actually signed a contract with e4 business or you signed a contract with BG for which e4business were just an agent acting on commission.

DVardysShadow

sswats wrote: »

Last october British gas automatically put our company on a rolling contract for 2 years at extortionate rates. We're a company with 6 employees, and we're paying almost £300 a month more than we were quoted from EDF.
We've been trying to get out of it but British gas refuse totally.

There is a section in Terms and conditions on cancelling the contract early but its all gobbledegook to me, so if someone can please help me with it. I understand theres a fee to pay, around £800 we calculated, which is a hell of a lot better than sticking with £300 extra a month for 17 months
Here is the relevent sections word for word.

Rather than flogging your way through the T&C's of this contract, if BG put you on to it automatically - and you acquired these particular T&C's purely as a result of them putting you onto their contract, you would be much better off examining their action in putting you onto this contract

anniecave

e4b were an electricity supplier who went under.
british gas took over their customers but I believe in most cases they couldn't continue with e4b's prices as they were less than cost price.

Last october (if you mean 6 months ago) was over a year after e4b went under so I'm guessing after e4b went under then you went onto a one year contract with british gas then they've renewed you at the end of the one year contract.

You must be using a very large amount for it to be £300 per month more. Are you sure those figures are really correct? Are you half hourly metered?

dogshome

Hi sswats - I'm afraid all the major suppliers, either directly or thro' an agent, have been playing the game of "Let's screw a small business", and of course they have paid high powered legal brains to make these contracts unbreakable.

This became such a scandal that in Jan this year Ofgem brought in new rules, but these are not retrospective - Google Ofgem and on the opening page, type "microbusinesses" into the search window in the top R/hand corner for more details.

I don't understand where the £800 release fee comes from as on my reading of the terms in your post, to get out early you pay for all the gas & elec BG estimate you would have used till the contracts end, plus a premium on each Kw and plus £100 - In other words it's cheaper to stay in than get out.

It may be possible to dump the contract by changeing the entire legal identity of your business, but it will need a lawyer to do it at some cost, plus the cost of new stationary/signage etc -Probably more than the £5100 you will overpaying for Gas/ Elec over the next 17 months?

Even on the new rules, it's down to the customer to read the T&C's and make sure they comply exactly with the cancellation procudures at the contracts end

Sorry I could not give constructive help
All the Best

sswats

Thanks for the help guys.
The £800 was just me misunderstanding the T&C.

Off the top of my head BG are charging just over 14p per KWH, whilst EDF agent got us a quote of 9.5p. about 50% extra

Funnily enough we had been considering changing the company. I took over the premises the beginning of the year with intention to take over the business from my employer.
The other option was to start it up as a new business.
This may push me towards that route.

again thanks for clarifying the situation for me.

dogshome

Hi sswats - Hope you go for legal change of business identity - makes my day to think of BG having their own contract pushed into where the sun don't shine.

You really are going to need a lawyer to ensure that there is clear blue water between the old firm and the new - BG have being playing this game a long time and if there so much as a mousehole left that joins the old and new firms, they will find a way to crawl through it.

Just bear in mind that whilst E.ons opening contract price looks good, make sure you have read the entire contract, particularly the End of Term cancellation procedure, before you sign it
All the very best