Npower Increases priced inside 12 month bonus contract - legal?

manglesey25

We switched to Npower Sign online 20 in December 2010 which pays a 'bonus' of £100 at the end of the 12 months if we pay by DD and stay with them until DEcember 10, 2011.

Today, they have increased prices. We normally switch suppliers when a price increase is announced, but Npower will dishonour the bonus.

If we were aware the price would increase during the contract period, we could have gone elsewhere and got it cheaper because the £100 bonus was factored into the contract price before the contract commenced.

Can they legally increase prices while we are still within a 12 month contract?

jalexa

manglesey25 wrote: »

We switched to Npower Sign online 20 in December 2010 which pays a 'bonus' of £100 at the end of the 12 months if we pay by DD and stay with them until DEcember 10, 2011.

Today, they have increased prices. We normally switch suppliers when a price increase is announced, but Npower will dishonour the bonus.

I believe NPower Sign Online 20 is a "guaranteed discount" and a "deferred discount" tariff. In which case you are the victim of a "double whammy". You will need to ask NPower to answer your "dishonouring the bonus" question. My reading of the Ofgem regulations (FWIW) is that the regulations are "silent" on the issue, which I very much fear is bad news.

Can they legally increase prices while we are still within a 12 month contract?

In answer to your (direct) question it is "legal" if it complies with the tariff Terms & Conditions. *If* it is a "guaranteed discount" tariff then any increase which leaves the tariff at least the "guaranteed" amount away from the reference tariff (normally standard tariff) is "legal", but you must be given notice and can act to "reject" the increase pending a switch.


:exclamati[note the recent threads about Ofgem and termination fees]:exclamati


For the benefit of others beware "deferred discount" tariffs if you do not understand the circumstances in which you could forfeit the discount.

Commonly tariffs from NPower and Atlantic feature "deferred discount".

manglesey25

Do you know the official postal address for Npower for me to write to them to formally reject the price increases?

eurmalian

Surely the ammount that you're going to save over 4 months by switching now isn't going to be more than the £100 that you would get for staying on this deal until December? I'd personally be tempted to sit it out, get the cash and then switch if you really want to...

MillicentBystander

I think npower's annual bonus paid in arrears may be another cause for our amazing backfoot to take up with ofgem. Let's be honest, this is an additional exit fee by another name. I wouldn't necessarily have a huge problem with it if it wasn't incorporated in the savings figures on switching sites. But if it wasn't included no-one would sign up for it in the first place.

NittyGritty

if the tarriff you were on was a fixed one then no they cant increase your prices until the end of your fixed tarriff you choose, however if on the other hand you pick a tarriff that is not fixed for a certain amount of time then yes they can change it and increase your price regardless of how long you have been on the unfixed tariff

manglesey25

I have looked in the T&C's and it does give a right to unlilaterally increase prices during the contract term. It mentions nothing about having to remain on the same tarriff during the term.

To receive the £100 annual DD bonus payment is for staying with Npower for the following 12 months from the commencement date.

After speaking to a supervisor, they say they will honour the £100 at the end of the commencement date because the T&C's literally means - remaining with npower, with no requirement for the consumer to stay on the same tarriff. It allows me to switch to their cheaper Fix 7 tarriff without losing the annual DD bonus.

jalexa

manglesey25 wrote: »

It allows me to switch to their cheaper Fix 7 tarriff without losing the annual DD bonus.

Personaly I strongly advocate fixed (or capped) tariffs so that might be a good move for you.

However be aware that the only way to minimise the future cost of leaving a "deferred discount" "arrangement" is to leave immediately after the discount is paid. If you are on a fixed tariff it very likely has early termination fees (which you can't avoid because the tariff and term is fixed) and possibly "deferred discount".

Commonly tariffs from NPower and Atlantic feature "deferred discount".

metrobus

I also have been on NP`s online 20 since last December.

How is this £100 bonus paid at the end of the 12 months ?

jalexa

metrobus wrote: »

I also have been on NP`s online 20 since last December.

How is this £100 bonus paid at the end of the 12 months ?

It is paid on the last day of the 12 months. I assume into your energy account, because allegedly it is already factored into your monthly payments, but I suggest you ask NPower.

manglesey25

NP tells me the £100 is paid onto the account as a credit at the end of the 12 months.

They might try an EDF and its left on the account as a credit when you switch suppliers. So always be sure its refunded back into your bank account