Switched and been charged an exit fee. Make sure it was legal.

DirectDebacle

There have been several posts recently where complaints have been made of suppliers applying penalty charges (Termination Fees) to customers switching suppliers because of a price increase.

The circumstances under which suppliers are not allowed to do this are laid down in the Standard Licence Conditions (SLC) of the Gas Act, 1986 and the Electricity Act, 1989. The SLC in both Acts are virtually identical.

In essence they state that if a customer rejects a unilateral variation to their contract by a supplier (usually a price increase but could be a reduction in a discount or in any other way that is of significant disadvantage to the customer),

The customer must reject the change within 10 working days of receiving the notification and change supplier.

There will be a form of words to this effect in your suppliers Terms and Conditions.

What will be more difficult to find in the T & C's is reference to the SLC that states that if the conditions of rejecting the unilateral change are satisfied then the supplier cannot charge any Termination Fees that would otherwise be payable.

Bear in mind that some tariffs also require that a particular payment plan must be used, e.g. by monthly DD. If as a result of rejecting a change you may find that any DD discount is also forfeited. It is possible that a supplier has not charged fees for switching individual gas or electric supplies (or dual fuel) but has removed a DD discount. This would also be open to challenge.

If you feel you have been unfairly charged an early termination fee, complain to your supplier. Refer them to SLC 23 and SLC 24. SLC 24.3 is the section of the law which prevents them from doing this.

You have up to 6 years from the date of the application of the Termination Fee to claim.

Ofgem are proposing changes to the SLC from the end of April. Their proposed changes can be found here:

http://www.ofgem.gov.uk/Markets/RetMkts/Compl/pricechange/Documents1/Gas_stat_con_notice_SLC_23(final%20version%209%20Feb%202011).pdf

http://www.ofgem.gov.uk/Markets/RetMkts/Compl/pricechange/Documents1/Elec_stat_con_notice_SLC_23(final%20version%209%20Feb%202011).pdf

Scroll down towards the end of the PDFs where the old regs are shown with strikethroughs and the new phrases inserted.

If the final changes are as those proposed then the above protection will be maintained.

Note that when the 30 days advance notice of a change (currently up to 65 days after) comes in, the notification of refusal to accept the change is on or before the date the change comes into effect.

Don't let them have you over.

davidgmmafan

You sir are a genius.

backfoot

I was happy to test this on my next switch,which we will be after EDF put up their prices.

I was very much of the same thinking, but as usual the main man has backed it up with facts and analysis and laid it out before us all.

Well done sir :T