Contract by default with British Gas

Mr_Trick

By failing to cancel a contract on time we find we have a two year contract with British Gas at roughly double the original contract price.

At present British Gas are offering to undercut any competitor by 10% - assuming the 10% undercut applies for one year and double the price applies for the following two years .. the ploy is profitable if just 3% of customers forget (or fail) to cancel their contracts.
Clearly the 'Default Contract' technique is profitable and legal .. but is it moral? Obviously there remains some misplaced faith in the name "British Gas" .. as they say.. "Dedicated to you" .. "At British Gas we've built our reputation by putting your needs first" . Clearly they win by persuading (?) 3% (or more) of their customers to think "It's British Gas .. they should be OK".

Do British Gas have a fair business model (as they claim)? What say this house?

KimYeovil

Immature crybabies shouldn't be running businesses. What say this house?

Mr_Trick

KimYeovil wrote: »

Immature crybabies shouldn't be running businesses. What say this house?

Are you suggesting British Gas are running a good con and as such they deserve to succeed?

Gerrard_8_lfc

I say British Gas run a sucessful business and have done for years. Lock in tariffs are common now. The 2010 fix was a great tariff for customers who signed up for it and benefited from it.

BG offer many different tariffs and it is your choice to which you choose and you do get prompts after fixed tariffs to make your option be it with BG or without.

Business is business they are there to make a profit

Mr_Trick

"..you do get prompts after fixed tariffs.."

The person responsible for opening letters claims she's never seen such a thing from British Gas - I don't want to get caught between her claiming unfair dismissal and British Gas claiming a legally binding contract by default. Any thoughts?

Premier_2

Don't dismiss your employee; provide her with additional training so that she is more efficient in carrying out her job in future

Cardew

I think Gerrard hasn't appreciated that you are on a business tariff and not a domestic fixed tariff.

It is common practice with virtually every company that business tariffs have a clause that commits you to a further fixed contract(usually at sky high prices) unless you give advance notice you are opting out at the end of your present contract; and you don't get any notice.

Loads of posts on MSE from small business owners who have been similarly caught. The problem is they are all 'at it' so if you attempt to move to another company - they won't accept you if the losing company object.

Mr_Trick

Thanks (all) for your comments. It seems likely that I have a few years to contemplate this problem so I'm not in a hurry. I don't expect to win this one but I would be pleased if my actions (here and elsewhere) help a few others to avoid the same trap.

I get the impression Kim Yoevil thinks 'business money' falls out of the sky - the employer gives a tiny proportion to employees and then runs off to the bank - laughing as he/she goes. Sorry Kim .. it just doesn't work like that.

I notice that people who are employed (even employers) can turn out to be every bit as as incompetent as people who are unemployed. Roughly half of the-people-in-the-street are employed (or employers) so I'm not sure why (for example) Kim Yoevil would want to discriminate against them.

Initially I have emailed my 'British Gas account manager' - I will report the result.

In my business (most of) my suppliers are honest and straightforward - they wouldn't last long if they weren't. What is unusual about BG is that one 'hit' is enough. Personally I don't think BG sent any notice of the new charges but this doesn't matter - a letter sent by BG is deemed to have arrived within two days - end of story.

On the grounds that negative option consent works both ways I intend to write to British Gas EVERY DAY with a letter explaining that I will accept their agreement to release me from the contract unless I receive written notice to the contrary within 35 days - five hundred letters - a small additional cost on my side - not sure about theirs. Any comments or advice on this tactic?

Offer#1, Offer #2 .. etc.

DVardysShadow

Mr_Trick wrote: »

I get the impression Kim Yoevil thinks 'business money' falls out of the sky - the employer gives a tiny proportion to employees and then runs off to the bank - laughing as he/she goes. Sorry Kim .. it just doesn't work like that.

Actually, I don't think anyone believes your money falls from the sky. It is more a kind of schadenfreude, knowing that if you ran British Gas and they were your customer, you would probably do to them what they are doing to you for the first part. And for the second part, it is knowing that if you were actually your bank, you wouldn't need money to fall from the sky - you would only need to mess up and let the government bail you out. But, yes it is tough being a small business.

spiro

As get says in numerous post about numerous products/services the T&Cs told you about this lock in clause but you 'forgot' about it.

As Martin says for those on 0% credit card deals, put an entry in your calendar (ideally electronic) to remind you to take the required action, in your case it would have been to contact BG to agree a new contract.

Cardew

Mr Trick,
You don't say when you were placed on this new price contract. However this may be of interest:

http://www.ofgem.gov.uk/MEDIA/FACTSHEETS/Documents1/probefs.pdf

The new rule for micro-businesses came into force on 18 Jan 2010(do you qualify as a micro-business?). The pertinent regulations are

"Ofgem has increased protection for micro-businesses with

new rules meaning that:

before entering into a contract a customer must be informed of the key terms and conditions;

within 10 days of a contract being agreed (or if an existing contract is extended) the customer should receive hard copies of the full terms and conditions and a statement of renewal terms (if the contract is of a fixed length);

customers will be contacted a minimum of 30 calendar days before the end of the notification window with an explanation of the options available including advice on what they should do to stop their contract from being rolled over, if they don’t switch or negotiate a new deal the maximum length of time a contract can be rolled over for is 12 months’; and at any point from when the contract is agreed until the end of the notice period, customers can give notice that they wish to terminate"

"Ofgem has no direct powers to regulate brokers but has recommended that they take steps to improve their business practices and hence, customer confidence. Ofgem is urging them to promote existing or new codes of practice to encourage best practice and transparency, particularly on which suppliers they represent and how they are funded."