Ofgem Ban Termination Fees Following Price Increases

backfoot

insanegloss wrote: »

It cannot, but the sentence was "discounted or guaranteed", wasn't very specific. Potentially it could lead someone to mistakenly believe they can get out of their fixed term without paying any termination fees during times of standard tariff price changes. Just clarifying the wording.

The document is posted now (as best as I can).

Fixed means fixed and is not relevant.

Discounted and Guaranteed are specific phrases invented by marketing executives to hide what are still essentially variable priced products.

Eventually,someone in authority,listened to the people.

Positive signs don't you think?

backfoot

dogshome wrote: »

The only question now is how we get you appointed as a lay member of Ofgem.
The general medical Council who govern Docters has them, so why not Ofgem?

It's actually a very good idea.It used to happen with the old Electricity Consumer Council but now the customer is very isolated from the action.

Personally speaking, it's one thing doing this as a hobby but another doing it as a job with formal responsibilities, timetables,meetings etc.

There would be plenty of good candidates ahead of me.

wakeupalarm

I recently switched from EDF energy discount v5 to the more expensive fixed saver v2 just before it was pulled. The only reason I switched to FS v2 was in anticipation of a price increase to ED v5. This clarification means I would have been better off to stay on ED v5.

It has the side effect of making discounted tariffs better value then fixed tariffs. It would mean that any increase in price would allow you to leave without termination fee. Some of these discounted tariffs were available at large discounts to fixed tariffs.

backfoot

wakeupalarm wrote: »

I recently switched from EDF energy discount v5 to the more expensive fixed saver v2 just before it was pulled. The only reason I switched to FS v2 was in anticipation of a price increase to ED v5. This clarification means I would have been better off to stay on ED v5.

It has the side effect of making discounted tariffs better value then fixed tariffs. It would mean that any increase in price would allow you to leave without termination fee. Some of these discounted tariffs were available at large discounts to fixed tariffs.

Exactly why the matter needed clarification. Fixing is a big commitment for many customers.Often it is made for incorrect reasons and a lack of analysis or understanding.

The fear of price increases has driven the marketing men to exploit fixed price products and combined with out of proportion termination fees was leading to some anti competive tactics by the Suppliers.

A lot of posters previously couldn't grasp the issue that termination fees on variable priced products was totally unfair.They thought they were getting something good,just because the starting price was below standard.:o

So even with a meagre guarantee of 1% below standard (say £10 on a £1000 bill),they were happy to accept termination fees in the range from £60 to £100.Finally I hope the significance sank in when that guarantee still allowed increases of 20% or more in many cases.:eek:

It was also an additional revenue stream for no good reason.

caveat_emptor

Remains to be seen whether the suppliers will take any notice of what is after all an advisory notice. '1.3. Ofgem has therefore decided that it is appropriate to issue guidance to clarify when SLC 23 applies to a price increase and therefore when the protections for consumers contained in SLC 23 and SLC 24 apply' says it all. If termination fees are knocked on the head I'll be away from my supplier faster than the proverbial rat up a drainpipe.

backfoot

caveat_emptor wrote: »

Remains to be seen whether the suppliers will take any notice of what is after all an advisory notice. '1.3. Ofgem has therefore decided that it is appropriate to issue guidance to clarify when SLC 23 applies to a price increase and therefore when the protections for consumers contained in SLC 23 and SLC 24 apply' says it all. If termination fees are knocked on the head I'll be away from my supplier faster than the proverbial rat up a drainpipe.

There's no downside :D

A number of Supplier's had already conceded the point given the recent price hikes.

It was important to establish the principle for the future and for those who wanted to play silly games. It also means if you read on that if they don't play ball there will be a full license amendment.

Just to clarify, it only concerns termination fees following a price increase.

Cardew

Well done backfoot!

You should get together with DirectDebacle who took on and beat NPower in the 'Sculpting' scam.

Laymen members of Ofgem would be excellent!

Consumerist

backfoot wrote: »

It also means if you read on that if they don't play ball there will be a full license amendment.

That's exactly what I was looking for and, I'm pleased to say, wasn't disappointed.

Well done, again, backfoot. Hope you're not getting too embarrassed at all this praise - well deserved. :T

Consumerist

We should now expect the Dirty Tricks Departments of the energy companies to be beavering away at the next scam to try out on their customers. They must be taking classes from the banks.

wakeupalarm

Well done indeed backfoot, as you say its the principle that's important.