MSE News: Escape energy lock-ins as prices soar

Consumerist

planetf1 wrote: »

. . . My account is paid by DD and everything is up to date . . .
Anything else in particular I should be aware of? I've read about the transfer fee being waived so will of course raise this with BG.

Might be useful to check your account balance to see if you owe BG anything or they owe you anything. When you give notice, ask how they intend to deal with any credit or debit balance. They may give you a refund, if appropriate, or pass the credit/debit on to your new supplier.

It would be wise, I think, to confirm that they are waiving any exit fees.

Edit
Don't forget that EON haven't announced any rises yet, so make sure you're going on to a fixed tariff.

Switches should take 4 - 6 weeks apparently.

Consumerist

jalexa wrote: »

What I am doing is "floating" a particular "uber consumer" interpretation. Right or wrong isn't important. I don't intend that you are in the firing line, rather Ofgem and/or Consumer Focus.
Sadly, they appear less sensitive to "criticism", or perhaps don't have a clue what this "debate" is all about. And/or (particularly Consumer Focus), what they are for.

OK, I take your meaning.

I would hazard a guess that these conditions were drawn up before the energy companies saw these rate linkages as a way to lock consumers into their tariffs and the regulator just hasn't caught up with that development yet. This is possibly why there appears to be a stony silence on the issue.

davidgmmafan

"My understanding of Ofgem's position is that if the price increase would require a change to the terms of contract then no exit fee would be payable. i.e. the contract has been unilaterally changed.
However, where the prices are linked to a reference price (i.e. a discount to a standard tariff) then no change to contract is required because the contract links the price to the standard tariff. i.e. if the standard tariff changes then so does the linked tariff without changing the contract."

That's what I thought it meant to, but my question is who the hell is going to be bothered about an exit fee other than the people who are locked into a tariff (by an exit fee) which has or is going to massively go up. Exit fees for fixed price tariffs AREN'T as issue as I think they pretty straight forward. Maybe its the article which is faulty? As it suggests get out of exit fees but the rule seems somewhat pointless.

In fact one could make the argument that the only reason they have the guarantee to be less than standard is so they don't fall foul of this rule. But then they're waiving fees anyway so I'm all confused

Consumerist

davidgmmafan wrote: »

In fact one could make the argument that the only reason they have the guarantee to be less than standard is so they don't fall foul of this rule. But then they're waiving fees anyway so I'm all confused.

Quite agree and so is everyone else onfused, it seems. Truth is, I think, that even the energy companies are as confused about the meaning of the licence conditions as we and Ofgem are. Only British Gas and Scottish Power have, so far, agreed to waive the exit fees and it remains to be seen what other companies will do; SSE, for example, don't appear to have said anything about it and it will interesting to see if they do.

jalexa

Consumerist wrote: »

Quite agree and so is everyone else onfused, it seems. Truth is, I think, that even the energy companies are as confused about the meaning of the licence conditions as we and Ofgem are.

I think that is a very fair post.

BTW, my "previous" opinion on "guaranteed discount" tariffs (and the right to "free" early termination on a price rise) is "publicly" stated on another Forum. It (was) that I was "not sure" so long as the post increase differential was at least the "guaranteed" differential. Having now studied the Ofgem licence conditions very closely, my personal opinion (FWIW) has changed from "not sure" to "any (rejected) increase triggers a fee waiver". But that is just my opinion.

Note that most "guaranteed discount" tariffs are sold with the initial discount significantly greater than the "guaranteed" discount. It is that reason that has resulted in "guaranteed discount" tariffs being at the top of the (Consumer Focus accredited) comparision tables for most of the last 12 months - and why they are "vulnerable" to an unscrupulous increase. But if forum posts are to be believed, at least British Gas and Scottish Power are being reasonable.

Now it is reported (by MSE) that Ofgem doesn't "agree" that there is a customer *right* to "free early termination" on the occasion of an increase to a "guaranteed discount" tariff and Consumer Focus appear to have been "deafeningly silent" on the issue for 12 months.

*If* it is true that there is no customer *right* to free early termination then that is just a different form of "misselling" but one which customer regulation has silently acquiesced in for at least 12 months.

Disgraceful.

nickp8

** IMPORTANT INFO **

I havent read the whole thread so someone else may have mentioned this but dont ring to cancel with your current supplier before or straight after you have applied to switch to a new supplier.

Reason for this is for e.g. in the case with British Gas say once you apply to leave, to do so without any exit fees they need notification from the new supplier within 15 days that your switiching to them. Not sure if they are allowed to put a time limit on this?

Due to the rules when switching supplier the first 14 days you have a cooling off period so the new supplier does not actually start the process of transferring you over till after the 14 days cooling off period.

So wait till you are a week or more into the cooling off period before you ring your existing supplier to give notification you are switching, so they will receive the notification your switiching from your new supplier within 15 days.

I am switching to an EOn fixed tariff. 14 day cooling off period ends in 2 days. Rang British Gas today and I didnt even need to mention the ofcom statement etc, the CS advisor said she will fill in the necessary form and there will be no exit fee as long as they are informed by the new supplier within 15 days we are switching to them.

I think many people will be caught out regarding the above.

Consumerist

nickp8 wrote: »

e.g. in the case with British Gas say once you apply to leave, to do so without any exit fees they need notification from the new supplier within 15 days that your switiching to them. Not sure if they are allowed to put a time limit on this?

Your post raises an interesting point but I would say that because the waiver is voluntary, the energy companies can apply whatever restrictions they like. If they were not entitled to charge a termination fee under the licence conditions, the time limits in those licence conditions would have to apply.

jalexa

nickp8 wrote: »

...Due to the rules when switching supplier the first 14 days you have a cooling off period so the new supplier does not actually start the process of transferring you over till after the 14 days cooling off period...

You do indeed raise a very interesting point, consistent with a literal interpretation of the rules, and in relation to not starting the transfer process until the expiry of the cooling-off period, something I was once informed by a supplier.

However, I'm not convinced that is right. I *think* there may be a technical difference between the losing supplier "finding out" from the gaining supplier and the actual transfer process proceeding later.

I believe the 28 day statutory notice period and the cooling-off period operate in parallel. In particular I think the losing supplier is made aware "immediately" so that they can get their "sorry you are leaving" letter in the post before the expiry of the cooling off period. Certainly that is what happened with my own recent switch to Edf FP 2014.

A good point and another example of the attrocious lack of clarity in the rules.

nickp8

Interesting as it looks like it differs from supplier to supplier.

In my case my 14 day cooling off period end in two days and no letter received from BG asking me to stay. When I spoke to Eon they said BG would be notified once the 14 days cooling off period has passed.

Big_MAC_4

I was on British Gas Websaver 11 and was initially told last week I would have to pay the exit penalties to switch to a fixed deal with another company. However, once I copied them Guy Anker's full article, they promptly backed down. I asked that they ensure all their call centre personnel were made aware of this and that no other customer in similar circumstances be charged the exit penalties - time will tell whether that message ever got passed on!