MSE News: Escape energy lock-ins as prices soar

Churchpolly

Hi, the latest on this is that at last British Gas have backed down and agreed to waive all penalty charges - this is what they said in an email today -

"in light of our price rise announcement we will be waiving all cancellation fees on variable tariffs for customers switching to another supplier. The fees will be automatically waived and you need take no further action."

But, just to be on the safe side I should inform them that you are switching due to their price increase and get a confirmation email off them - seems to me they arent speaking to one another with conflicting information being sent out by various members of staff!

good luck and thanks again to Martin for saving me some money!:beer:

Polly

landsker

Having given British Gas notice to leave, within the 15 working days from the 18th. August, I received this email today.
QUOTE

Dear Mr XXXXXX

Thank you for the enquiry you sent, I’m sorry it’s taken me a while to get back to you.

As you’ve let us know you’re transferring to another supplier we’ll charge you on our current rates until the day you leave us.
To make sure this happens we need to receive notification from your new supplier within 15 working days from today.If we don’t, we’ll charge you on our new rates from 18 August 2011 until your transfer date and also cancellation fees will be applied. So please make sure your transfer is going ahead.

Please contact us should you need any help in the future and thank you for contacting us.
We're listening, so tell us what you think - if you've got a moment please complete my survey to let me know how I've done.

Regards

Krishna Kunwar

Customer Service Advisor

britishgas.co.uk - Looking after your world.

END QUOTE.

The slippery bar-stewards are trying to re-impose a 15 day time limit on my NEW suppliers of 15 days from today to effect the switch notification!
OR cancellation fees will apply - please note!:mad:
If one's new suppliers are snowed under and cannot inform BG in this time scale, as is possible, it seems to me a back-door for garnering the fees they said they would waive, by putting another condition in the agreement.
Slippery lot!
:eek:

jalexa

landsker wrote: »

Having given British Gas notice to leave, within the 15 working days from the 18th. August, I received this email today.

This is a very interesting point (which was raised by poster nickp8 quite a few posts ago, I think in this thread..

http://forums.moneysavingexpert.com/search.php?searchid=108377132 )


The "15 day notification requirement" is indeed my *literal* interpretation of the relevant regulations. What was intended by Ofgem "gawd only knows". A "literal" interpretation leads to the completely absurd outcome (which not unreasonably concerns you) of the customer entitlement being governed not by customer action, but by the action (or inaction) of a "not disinterested" party, being the losing supplier.

I suspect that the palpable unfairness of the contract term would not survive challenge, and Ofgem's customer reputation, if it has any to lose, would not survive a failed challenge.

As words, the "literal" interpretation IMHO is clear, it's "15 days". The "practical" interpretation I have no idea, but now that BG have stated their interpretation in writing, sadly its just yet another piece of customer concern resulting from regulatory "idiocy" for Ofgem and/or Consumer Focus to "wise" or "fess" up to.

Sadly, sadly, its Saturday and I doubt they are paying much attention.

jalexa

nickp8 wrote: »

** 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.

Given the recent post highlighting a BG email comfirming your interpretation, I hereby withdraw my qualified response to your post. Until we hear from Ofgem and/or Consumer Focus (to the contrary) I have no reason to doubt the literal interpretation of the regulations you brought to the forum's attention.

I did also look for my "sorry you are leaving" letter and the date on the letter was consistent with the losing supplier not hearing from the gaining supplier until the expiry of the cooling-off period - as you suggested.

Well done.

backfoot

If a customer falls foul of this idiotic 15 day rule,wouldn't they have a claim against the acquiring supplier for the additional costs.

The customer having done nothing wrong has lost out due to the new supplier not acting within Ofgem guidelines. (the same 15 day rule).

jalexa

backfoot wrote: »

The customer having done nothing wrong has lost out due to the new supplier not acting within Ofgem guidelines.

You mean there are Ofgem "guidelines" or are you referring to the Licence "idiotic" wording?

backfoot

Yes. License Condition as governed by Ofgem. A guideline in the broad sense.

I think you get my drift. Sorry for the very slight innacuracy.

midas67

Ok following my original post on page 3 of this thread, I have now sent a letter to Consumer Direct with a copy to Ofgems consumer Affairs team, about this whole cancellation fees debacle/confusion, and list a copy below.

I will post their reply when I get one.

This follows getting 2 responses from British Gas both contradicting each other. I received an E-mail from them (as copied on my original posting) saying that the cancellation fee was not applicable.

Then I received a later letter from British Gas Complaints management team saying that the cancellation fee cannot be waived as I am on an online tariff (Websaver 8) which provides a minimum discount of 6% on the standard tariff rates.

Confused - Yep you better believe it!!!

I think that this is an area that is ripe to be championed, highlighted and challenged by MSE. How many people are/have been in the past wrongly charged a cancellation fee?

Just another area for the Energy companies to increase their already bloated profits and us, as usual to lose out!! :mad:

I hope that others agree with the points I highlight at the end of my letter, with respect to my recommendations.

I sincerely hope that Consumer Direct and Ofgem take this seriously and do something about all of this.

Thanks for listening.

Regards

Michael

:T

Letter sent to Consumer Direct/Ofgem

Re: - Cancellation charges on gas/electricity contracts

I am writing to you in response to conflicting information and confusion experienced by myself and other consumers, regarding the above.

I recently contacted British Gas to say that I wanted to cancel my contract with them on the Websaver 11 tariff, following their recent price increases, applicable from the 18th August 2011 and did not expect to be charged the £60 cancellation fee.

This followed advice I read in an article on the Moneysavingexpert website, (link escape-energy-lock-ins-as-prices-soar article on MSE) as copy enclosed.

However I was told that I would have to pay the fee and that it was not possible to waive.

I also E-mailed British Gas on the 20th July 2011, as enclosed copy. I then received a response by E-mail from them the next day (copy also enclosed) saying that the cancellation fee will not be applicable on my accounts.

I also sent a letter to British Gas Complaints Management Team on the 20th July 2011 and received a response from them on the 27th July 2011 (copies enclosed), contradicting the E-mail from British Gas above, by saying that the cancellation fee cannot be waived.

The contradictory information and confusion outlined above echoes that being experienced from many other consumers, with regard to the payment of cancellation fees following an announced price increase and how difficult it can be to get these charges waived/refunded.

The forum webpage at (Link to this MSE forum thread) highlights the problems consumers are having with respect to cancellation charges.

From the above webpages you will see that many people and the energy companies themselves are confused about the cancellation charges. Some people are having them waived and some are not.

It is my understanding that condition 24.3(c) of the supply licence quite clearly shows you cannot charge a termination fee if the contract is ended because of a variation in the contract term, such as with an increase of charges (condition 23.3(a).

I have outlined further details on this within my letter to British Gas on the 20th July 2011, as copy enclosed, including quoting the above relevant conditions in full of the supply licence.

It would not be fair and equitable for an energy company to put up its prices and then charge customers a cancellation fee when they leave their contract because of the increase in prices?

Given the amount of confusion and misinformation, I would recommend the following:-

1. There needs to be clarity about when cancellation fees do not apply, such as when prices are increased on fixed term contracts

2. The above information needs to be made clear to the energy companies and to consumers.

3. There needs to be clear information about cancellation charges on the energy companies, Ofgem’s and Consumer Directs websites in terms that a consumer can understand and the process on how to prevent cancellation fees being charged

4. When an energy company notifies customers of a price increase it should state clearly if a cancellation fee is applicable/not applicable if they leave the contract and the process on how to prevent cancellation fees being charged

5. There should be a clear process and information on Ofgems/energy company/Consumer Directs websites, whereby consumers can claim a refund where they have been wrongly charged the cancellation fee in the past

Presently there is little clarity on when cancellation charges apply and different people in the same company are giving conflicting advice/answers.

It appears that these charges are being levied incorrectly in many cases.

I have also copied this letter and accompanying documents to Ofgem's Consumer Affairs Team for their information and comments.

I would welcome your comments on the above and when the cancellation charges cannot be levied.

Consumerist

midas67 wrote: »

I think that this is an area that is ripe to be championed, highlighted and challenged by MSE. How many people are/have been in the past wrongly charged a cancellation fee?

Given the amount of contradictory opinion in this thread, I too think MSE should get involved in this one.

It will be interesting to hear any response you get to your letters but I suspect they will say that those tariffs which are discounts to a standard tariff, rather than being given in monetary terms, will require a termination fee to be paid. This is my understanding of what Ofgem have already said, according to the original article.

backfoot

Consumerist wrote: »

Given the amount of contradictory opinion in this thread, I too think MSE should get involved in this one.

It will be interesting to hear any response you get to your letters but I suspect they will say that those tariffs which are discounts to a standard tariff, rather than being given in monetary terms, will require a termination fee to be paid. This is my understanding of what Ofgem have already said, according to the original article.

The logic being?

On a variable contract a supplier increases prices by 1%. There is a variation and you can cancel and avoid the termination fee.

On a standard tariff they increase the price by 20%, you can move without penalty.

On a discounted to standard tariff they put the price up by 20%. Are they really saying that you can't move without penalty?

Just because some idiotic Ofgem spokesperson has given a phone answer to a MSE enquiry doesn't make it sacrosanct.

There is no difference between all three situations under the License conditions.

Just because some fancy marketing bod has formulated a product name and a worthless set of T and C's, doesn't change the nature of the beast,it's still a variable contract with the same 'right to cancel'.