MSE News: Escape energy lock-ins as prices soar

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Households faced with price hikes can use a loophole to escape the clutches of tariffs that appear to tie them in ..."

Read the full story:
Escape energy lock-ins as prices soar

cdsheldon

I'm on British Gas WebSaver 11 tariff for electricity, and in my area, on the Economy 7 tariff, day units are going up by 23% and night units by a massive 38%. I've already asked British Gas if they will wave the £30 penalty charge if I switch to another suppler but they have told me they won't.

Consumerist

cdsheldon wrote: »

I've already asked British Gas if they will wave the £30 penalty charge if I switch to another suppler but they have told me they won't.

According to the article, BG have said they will not make the charge for any variable-tariff customers.

A British Gas spokesman says: "For customers on a variable price deal, they have at least 30 days before the price change takes effect to contact us and move to another deal or supplier without charge."

You may have been misinformed by call-centre staff so I would try to get this confirmed.

lektr0n

I was arguing this with British Gas yesterday pointing out standard conditions of the gas/electricity supply licence 24.3 which state...

Termination Fees

24.3 The licensee may include a term in a Domestic Supply Contract requiring a Domestic Customer to pay a Termination Fee to end that contract except in any of the following circumstances:

(a) the contract is of an indefinite length;

(b) without prejudice to sub-paragraph (a), the contract allows for both a fixed term period and a period of indefinite length and it is brought to an end during the period of indefinite length; or

(c) the licensee gives Notice of a unilateral variation of a term of the contract in accordance with paragraph 3 of standard condition 23 (Notification of Domestic Supply Contract terms) and paragraph 5 of that condition binds the licensee.


And 23.3...

23.3 If, in accordance with the terms of a Domestic Supply Contract with a Domestic Customer, the licensee unilaterally varies a term of the contract:

(a) to increase the Charges for the Supply of Gas to a Domestic Premises; or

(b) in any other way that is to the significant disadvantage of the customer


It states clearly they can't charge a termination fee if the contract is ended because of a price rise. Where the author of this article gets 'loophole' from I'm not sure.

Needless to say British Gas backed down once it was put to their legal department.

ian1969uk

Did backfoot write that article?

philgods

Also on BG websaver 11 and called them about this a couple of days ago.


The initial call taker said the exit fee would apply.
When I challenged this, I was put on hold for nearly 5 minutes and he then came back to me and said I was right and the exit fee would not apply. He also tried to tempt me with £50 credit to be applied to my account in 6 months. I declined and am switching to EDF fixed online s@ver2.

TIMMY85

Cancellation charges won't apply if a customer notifies BG of their intention to leave due to the price rise. A form needs to be completed by the advisor. The new supplier then needs to notify British gas of the transfer within 15 days. If that timescale is not kept cancellation charge will apply.

Consumerist

Hi lektr0n and welcome to the MSE forum.

I think Ofgem's position is fairly clear from the article :-

Under those rules, Ofgem stresses not all variable rate customers are eligible to escape their exit fee, such as where there is no change in the contract term. In particular, this applies to customers whose deal tracks their suppliers' standard rate by giving a percentage discount off that price. Such a contract would allow for a rise as there is no monetary definition of the standard rate.

The websaver 11 is such a tariff, being a 6% discount from the standard tariff.

Further down in the article, however, BG has apparently decided to waive the charges, as posted earlier.

angela110660

Just been reading this week's email update about locking into a fix while still available. We are on BG Websaver 10 and decided to take a look elsewhere. Used EnergyHelpline and all available is EON Age Concern and a British Gas fixed. No mention of the ones shown in the MSE email. Not going to do anything for now - just use less gas!

rdwarf12

I just received / read this article today (Wednesday)
http://www.moneysavingexpert.com/news/utilities/2011/07/escape-energy-lock-ins-as-prices-soar

I switched yesterday using a cash back link and the EDF website.

My question is can I still avoid exit charges ?
What do I need to do ?

Is it as simple as let British gas know I have just switched and I want to not pay the exit charges.

Or will I qualify auotmatically ?

Leon_W

I have been arguing this point with British Gas this morning.

I am on Websaver 10 and theoretically exit charges apply until Feb2010 and I wish to switch to a fix with EDF but there is all this conflicting opinion !

British Gas would not back down and asked where I had read that I could exit without penalty and wanted proof as in an article or statement from a British Gas spokesman so I have forwarded them a link to this and going to see what they say.

I will update as soon as I hear anything.