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Have I been ripped-off by First Utility ?
HaveIBeenRippedOff
Posts: 9 Forumite
in Energy
I feel that I have been ripped off by my energy company, First Utility.
Can you please help me to know if I'm wrong to feel this way, and First Utility have acted correctly.
If, on the other hand, I have been maltreated, please also let me know if I have any rights to rectify the situation.
In January 2010, I did a comparison of the energy market, and found First Utility dual fuel online was the cheapest.
The rates they were offering were not the cheapest, but once a 12.5% discount off of their rates was taken into consideration, which was deducted if you stayed with them for 12 month, the rates were better by a considerable margin than any other competitor for our situation.
On 28th July 2010, I received my monthly email from First Utility notifying me of my monthly bill. Scrolling down towards the bottom of the email, off-screen initially, was a notice:
'Updates to your prices
We’ve updated your prices. To view your new prices for electricity and gas please click here.'
If I hadn't been reading the email closely, I would have missed the notice.
Clicking on the link led me to a notice stating that gas and electricity prices were rising, and First Utility had been forced to raise my prices from 1 July 2010, and there followed a list of varied rises in the rates for my gas and electricity, with my gas standing charge going up 110%, my electric per KwH rate going up 15%, and an across the board average increase to my net payments of almost 20% (using First Utility's own comparison figures).
OK, I thought, gas and electricity prices must have gone up across the board. I wonder what everyone else is charging. But other tariffs had not gone up.
Worse, First Utility themselves were offering a tariff to new customers that was broadly similar to my original tariff (ie almost 20% cheaper net final payments than my raised tariff using First Utility's own comparison figures). The individual rates being offered to new customers were different, with gas actually cheaper and electricity more expensive than the original tariff, but using First Utility's own across the board comparison figure showed an almost unchanged net resultant tariff for new customers, compared with my 20% increase.
How could:
1) First Utility put my tariff up effectively by 20%, with explanations of rising gas and electricity prices, whilst still charging new customers an almost net-unchanged reduced tariff ?
2) How could First Utility put my tariff up on 1 July 2010 and only notify me of the increase on 28 July 2010 ?
I could not leave First Utility for another six months without paying 12.5% more for my first six months energy purchase from them (as I would lose the 12.5% year's discount). But if I stayed, my energy prices would be 20% higher for the second six months !!!
I do not know if this is correct, but to me it seemed possible that First Utility were playing a game, offering customers a cheaper tariff for a year to get them hooked, but then increasing the price by 20% mid year, so that the net effect was more expensive energy prices than I could have purchased elsewhere initially.
There followed eight weeks of frustration, as I raised the issue with First Utility, whose response was that they had done nothing wrong, they only had to notify me 28 days after any price rise (which they had done), and that they were entitled to raise their prices whilst keeping their prices low for new users.
I asked to be able to leave First Utility there and then and benefit from the 12.5% discount promised for the year to date, but they refused. Either I left then, and lost the 12.5% discount (so my original decision to use First Utility was wrong), I was told, or I remained for a year with the prices raised almost 20% over new First Utility joiners.
After eight weeks, I took my complaint to the (I believe) independent Energy Ombudsman.
After a couple of months, I have just heard back.
To my horror, the Energy Ombudsman ruled:
1) Energy companies only have to notify their customers 65 days after they have raised their customers' prices !?! I cannot believe it. It costs a company nothing to send an email (as a term of my First utility contract, I do not receive letters, only emails - which is fine by me), and yet they are allowed to wait 65 days before sending an email notifying a customer that their energy rates have gone up 65 days ago - by almost 20% in my case !!! How can this be allowed ? Do we live in the steam age ? In the financial world, banks and companies have to give you 30 days notice in ADVANCE of any price rise. Maybe energy is different, but at least an email notification should be sent at the time an increase is made - how can the Energy Ombudsman allow notification of increases retrospectively 65 days after they occur !!?!!
2) First Utility were allowed to lock me in to a year's contract in order for me to benefit from the 12.5% discount which was a core part of their rates, and yet they were allowed to increase their tariff to me but not to new joiners only three months after that contract commencement. First Utility had acted reasonably in so doing ruled the Energy Ombudsman !?!
I feel absolutely screwed by the system, and financially taken advantage of.
Maybe I am wrong, and I should accept that First Utility and the Energy Ombudsman are correct, and should expect to sign up to a deal which to my mind is misleading.
My feelings are that the system is out of control, and the Energy Ombudsman is not interested in consumers or consumer rights or energy company responsibilities.
There are my feelings right now, not facts.
Please help me to know if my feelings are right or wrong.
Can you please help me to know if I'm wrong to feel this way, and First Utility have acted correctly.
If, on the other hand, I have been maltreated, please also let me know if I have any rights to rectify the situation.
In January 2010, I did a comparison of the energy market, and found First Utility dual fuel online was the cheapest.
The rates they were offering were not the cheapest, but once a 12.5% discount off of their rates was taken into consideration, which was deducted if you stayed with them for 12 month, the rates were better by a considerable margin than any other competitor for our situation.
On 28th July 2010, I received my monthly email from First Utility notifying me of my monthly bill. Scrolling down towards the bottom of the email, off-screen initially, was a notice:
'Updates to your prices
We’ve updated your prices. To view your new prices for electricity and gas please click here.'
If I hadn't been reading the email closely, I would have missed the notice.
Clicking on the link led me to a notice stating that gas and electricity prices were rising, and First Utility had been forced to raise my prices from 1 July 2010, and there followed a list of varied rises in the rates for my gas and electricity, with my gas standing charge going up 110%, my electric per KwH rate going up 15%, and an across the board average increase to my net payments of almost 20% (using First Utility's own comparison figures).
OK, I thought, gas and electricity prices must have gone up across the board. I wonder what everyone else is charging. But other tariffs had not gone up.
Worse, First Utility themselves were offering a tariff to new customers that was broadly similar to my original tariff (ie almost 20% cheaper net final payments than my raised tariff using First Utility's own comparison figures). The individual rates being offered to new customers were different, with gas actually cheaper and electricity more expensive than the original tariff, but using First Utility's own across the board comparison figure showed an almost unchanged net resultant tariff for new customers, compared with my 20% increase.
How could:
1) First Utility put my tariff up effectively by 20%, with explanations of rising gas and electricity prices, whilst still charging new customers an almost net-unchanged reduced tariff ?
2) How could First Utility put my tariff up on 1 July 2010 and only notify me of the increase on 28 July 2010 ?
I could not leave First Utility for another six months without paying 12.5% more for my first six months energy purchase from them (as I would lose the 12.5% year's discount). But if I stayed, my energy prices would be 20% higher for the second six months !!!
I do not know if this is correct, but to me it seemed possible that First Utility were playing a game, offering customers a cheaper tariff for a year to get them hooked, but then increasing the price by 20% mid year, so that the net effect was more expensive energy prices than I could have purchased elsewhere initially.
There followed eight weeks of frustration, as I raised the issue with First Utility, whose response was that they had done nothing wrong, they only had to notify me 28 days after any price rise (which they had done), and that they were entitled to raise their prices whilst keeping their prices low for new users.
I asked to be able to leave First Utility there and then and benefit from the 12.5% discount promised for the year to date, but they refused. Either I left then, and lost the 12.5% discount (so my original decision to use First Utility was wrong), I was told, or I remained for a year with the prices raised almost 20% over new First Utility joiners.
After eight weeks, I took my complaint to the (I believe) independent Energy Ombudsman.
After a couple of months, I have just heard back.
To my horror, the Energy Ombudsman ruled:
1) Energy companies only have to notify their customers 65 days after they have raised their customers' prices !?! I cannot believe it. It costs a company nothing to send an email (as a term of my First utility contract, I do not receive letters, only emails - which is fine by me), and yet they are allowed to wait 65 days before sending an email notifying a customer that their energy rates have gone up 65 days ago - by almost 20% in my case !!! How can this be allowed ? Do we live in the steam age ? In the financial world, banks and companies have to give you 30 days notice in ADVANCE of any price rise. Maybe energy is different, but at least an email notification should be sent at the time an increase is made - how can the Energy Ombudsman allow notification of increases retrospectively 65 days after they occur !!?!!
2) First Utility were allowed to lock me in to a year's contract in order for me to benefit from the 12.5% discount which was a core part of their rates, and yet they were allowed to increase their tariff to me but not to new joiners only three months after that contract commencement. First Utility had acted reasonably in so doing ruled the Energy Ombudsman !?!
I feel absolutely screwed by the system, and financially taken advantage of.
Maybe I am wrong, and I should accept that First Utility and the Energy Ombudsman are correct, and should expect to sign up to a deal which to my mind is misleading.
My feelings are that the system is out of control, and the Energy Ombudsman is not interested in consumers or consumer rights or energy company responsibilities.
There are my feelings right now, not facts.
Please help me to know if my feelings are right or wrong.
0
Comments
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Yes, they are currently allowed up to 65 days retrospectively to inform you. It is absurd, but perfectly legal.No free lunch, and no free laptop
0 -
Yes, they are currently allowed up to 65 days retrospectively to inform you. It is absurd, but perfectly legal.
Thanks,
But have First Utility acted reasonably by specifying a year's rate with bonus if you remain a year, and then putting the rate up part way through the year, so that the bonus is not (certainly in my case and I am worried was possibly never intended to be - I don't know) beneficial when compared with their advertised current new user rates ?0 -
All utility suppliers also reserve the right to increase (or indeed reduce) prices within the contract period, unless you are on a fixed tariff.No free lunch, and no free laptop0
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Hi HaveIBeenRippedOff - Yes I'm afraid you have.
If FU, Fill in your own letters between the capitals, had put your rates up whilst still offering the same as your old tariff to new customers, then you'd have a case.
BUT they introduced a new tariff for new customers, and that whilst it may be close to your old one, it is not the same and that they can get away with.
Your only remedy is to vote with your feet.0 -
Hi HaveIBeenRippedOff - Yes I'm afraid you have.
If FU, Fill in your own letters between the capitals, had put your rates up whilst still offering the same as your old tariff to new customers, then you'd have a case.
BUT they introduced a new tariff for new customers, and that whilst it may be close to your old one, it is not the same and that they can get away with.
Your only remedy is to vote with your feet.
Isn't this market abuse (that is the way it seems to me) ? And if so, how can it be allowed by the energy regulator ?
In other industries, wouldn't the Ombudsman step in to stop this kind of shenanigans ?
So why is the Energy Ombudsman happy to let customers be notified 65 days AFTER retrospective price increases, and if you are correct, happy to let energy companies play a game of deception with customers by shuffling a few number around ??
Is the Energy Ombudsman independent, or just a tool for the energy companies ?0 -
It is up to you to separate the different elements. All suppliers have variable tariffs as their cheapest and many have annual/long-term bonuses and penalties. It is up to you to look at the base/starting price and decide whether you want to gamble with that tariff.
The 90 days/60 working days rule acts in your favour - you are able to receive one to three months supply at the original price if you choose to reject it and switch to an alternative supplier.0 -
It is up to you to separate the different elements. All suppliers have variable tariffs as their cheapest and many have annual/long-term bonuses and penalties. It is up to you to look at the base/starting price and decide whether you want to gamble with that tariff.
The 90 days/60 working days rule acts in your favour - you are able to receive one to three months supply at the original price if you choose to reject it and switch to an alternative supplier.
I believe you have fundamentally missed the point !
Is it OK for an energy company to repeatedly offer a 4% cheaper tariff (made up of a 6% more expensive tariff and a 10% discount for staying the year), if it intends to put up that tariff 20% within six months (whilst retaining a broadly similar cheap tariff for new joiners) ?
Staying for 3/6 months is detrimental not beneficial under these terms!
Shouldn't the Energy Ombudsman prohibit this misleading practice ?0 -
IT IS A VARIABLE TARIFF. Why is varying a variable tariff misleading? If you do not want the price per kWh to vary over a fixed term then choose a fixed price tariff - plenty are available.
You are not tied in for a year - you are free to provide 28 days notice at any time and flit. To counter the costs of this annual bonuses are offered. Would you rather the domestic market be opened up to tied, variable contracts - tied as in you are absolutely not allowed to change supplier? You know at the outset that this bonus is a separate consideration.
The options are there - you choose a variable tariff you subsequently decided was not for you. The practices are rather annoying - but they are not misleading. You don't want what you regard as an effective 'lock-in' - then choose a standard or fixed tariff or a tariff without such bonuses.0 -
... The practices are rather annoying - but they are not misleading. You don't want what you regard as an effective 'lock-in' - then choose a standard or fixed tariff or a tariff without such bonuses.
Kim,
If the practices are annoying, then there is a good chance that they are misleading.
In fact, I believe they are misleading.
Are there not many examples in other industries (such as the Financial and retail) where such practices HAVE been ruled misleading ???
I strongly have the impression there are.
If so, why does the energy industry play by different, anti-consumer rules ?0 -
Hi HaveIBeenRipped Off - The energy Ombudsman's office is not a State Funded Regulation agency, it's funded by the industry and whilst it does do a good job in supporting an individual complaint where it's justified, it does not collect and catoragise abuses and report them to Ofgem.
Basically it's there to wash the industries dirty laundry, but keep it out of sight
And it all going to get worse.
In 2002 we started out with the State agencies of Ofgem the overall regulator and Energywatch who dealt with individual complaints, then in 2009 whilst Ofgem were saying it was all working well. Energywatch, who actually dealt with the problems, said it was not.
The result was the Govt. closed down Energywatch and put in Consumer Focus to deal with individaul complaints on not just Gas & Elec, but also the Post Office !
Forward to 2010, Consumer Focus took on n'power - after Ofgem had lightly wrapped their knuckes - and hammered them to such a point that n'power are paying millions back to customers
The Govt's reward for Consumer focus who have been so successfull in protecting customers - Bigger Budget or maybe even a Bonus? - Forget it, they are to be thrown onto the Bonfre of the Quangos.
The Replacement will be your local trading Standards office who are funded by your local authority, who at this time have little knowledge of the Utility Industries, nor an established network by which information on abuses can be exchanged nationally0
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