Claim Back Termination Fees

backfoot

Ofgem have ruled that Termination are not payable following price rises.

http://www.ofgem.gov.uk/MARKETS/RETMKTS/COMPL/PRICECHANGE/Documents1/Guidance%20letter%20on%20SLC%2023.pdf

Customer's who have switched and been charged Termination Fees should contact their Supplier and reclaim those amounts falsely charged.

Sterling

Well done Backfoot, this is a stunning achievement by you, and a very important one.

Now that you have obliged Ofgem to take you seriously as regards this issue, I wonder if you think Ofgem should also consider conditional discounts, because of course these are, to all effects, exit fees by another name.

As MillicentBystander has pointed out on other threads. Npower, for example, has many tariffs which have such discounts of up to £105 inc VAT, but these discounts are conditional upon the customer staying with Npower until at least twelve monthly DD payments have been made.

So, if a customer leaves early because Npower has hiked up its prices, as things stand at present the customer loses the entire discount, just as if it were an exit fee. And if Npower is allowed to continue to use this crafty device, what’s to stop the other companies following suit?

Surely Ofgem’s position is untenable if it takes the stance it has on exit fees (where a customer rejects a price hike) while at the same time saying nothing about conditional discounts, where the customer loses the money in the same circumstances.

backfoot

Thank you Sterling for your very kind comments. I have also appreciated the very positive feedback from other posters and it does make it all worthwile to hear a simple thank you.:)

I have already raised both the issue of 'conditional discounts' and 'Eon's final bill policy' with Ofgem. I did this under the Consultation to the Retail Market Review.It seemed most appropriate because that Review had majored on confusion marketing,proliferation of tariffs and lack of transparency.

I believe Consumer Focus have also put forward similar views.

Both of these policies as you rightly identify are designed to catch out the unwary and are implicitly unfair. The parallel with termination fees is a good one.

I would hope Ofgem would be able to negotiate these away as part of their Review. They have made a lot of noise about it and we will have to see if they pick up on these obvious issues.

I would encourage others to write to Ofgem if you feel strongly about these issues. It will look better if there are other representations than just myself.

backfoot

My view is that the Eon final policy is in breach of SLC 23.6 following a unilateral price variation.

They withdrew their exit fees under these circumstances previously but didn't respond to representations made about the final bill policy.

Subject to the correct notice being given,they are obliged to maintain the principal pre increase terms and conditions while the switch goes through. i.e.the price and associated discounts.

I don't see why such a policy has gone unchecked.

MillicentBystander

I thought npower's annual discount was no longer included in the switching sites savings figures so I'm assuming npower have tweaked the T&Cs to get it included again? Without it being included, how many would choose them on a switching site?? I reckon this would be a BIG blow for npower if they lost this one. let's hope OFGEM are harder on them than they were with sculpting (IIRC OFGEM got £2 million out of them and Consumer Focus £70 million?)

backfoot

Yes it looks like NPower have tweaked this because the DD discount was being excluded in the Comparison Tables.

The conditions now for a new NPower customer are:


'Provided you meet all of the requirements you will become eligible for our annual Direct Debit discount on the first anniversary of the date on which supply of your second (or only) fuel by us started and it will be credited to your electricity and/or gas accounts on that date. During your first year on the Sign Online 22 offer your annual Direct Debit discount is included in the agreed monthly Direct Debit payments to be made by you. If for any reason during your first year on Sign Online 22, you become either ineligible for the annual Direct Debit discount or only eligible for a reduced amount you must repay the value of such credit. Your monthly direct debit payments may no longer be appropriate to meet your estimated consumption. Your annual Direct Debit discount is not included in the agreed monthly Direct Debit payments if you are an existing npower customer.'

So it appears that they now pay the discount as you go along. However, if you leave they will ask you to repay that amount. :eek:

I think that they shot themselves in the foot.

Under License Condition 23.6, following a unilateral variation,they have to maintain the pre increase principal terms and conditions. Of course that includes price and associated discounts.

MillicentBystander

So, if you are paying the DD amounts based on the figure including the £105 annual discount and you leave before your 12 months are up, the £105 (or pro rata equivalent) is re debited? That's most definitely an exit/termination fee!

backfoot

By another name yes.

It doesn't matter though what it's called. They have to hold the price and discounts at the pre increase prices, following the unilateral variation.

By allowing the discount, they are showing it has been earned as part of the principal terms. It is Npower who break the contract with the unilateral variation and won't be entitled to claim the discount back.

They cynically altered the T and C's to further hide their deferred discount, but it has badly backfired now Condition 23 and 24 has been clarified.

:rotfl:

MillicentBystander

This makes a huge difference to their standing on the switching sites! Take Midlands area and their cheapest SOL23 tariff (this is pre-increase although npower have announced increases but not on this tariff), gas 16500 electric 3300 and add £105 to the SOL23 figure showing:

http://www.energyhelpline.com/fri/fri/Domesticenergy/Domestic/Results?Id=62d0a5fc-31fe-4bb0-aee7-9f43009a2b36&PostCode=WV1%207AN&RegionCode=5&CurrentGasTariffId=444632&CurrentElectricityTariffId=444576&CompareGas=True&CompareElec=True&GasUsageUnknown=False&ElecUsageUnknown=False&GasProfileOrigin=UserInputKWh&ElecProfileOrigin=UserInputKWh&CurElecSpendPeriod=PerMonth&CurElecUse=3300&CurElecUsePeriod=PerYear&CurElecEconomy7=False&CurElecEconomy7Usage=0.55&CurGasSup=57&CurGasSupTariff=1174&CurGasPayMthd=1&CurGasSpendPeriod=PerYear&CurGasUse=16500&CurGasUsePeriod=PerYear&ComparisonType=GasAndElectricity&PrefRadioSelector=None&AllTariffs=AllTariffs&SortByPrice=ExpectedSaving&SecSortByPrice=ExpectedSaving&FuturePayMthd=1&ClientHasJavaScript=False&CurElecSup=57&CurElecSupTariff=1174&CurElecPayMthd=1&SupplyType=DualGasAndElectricity&SimpleGasUsageLevel=Medium&SimpleElecUsageLevel=Medium&ShowAll=True&Skip=0&Page=0&SecShowAll=False&SecSkip=0&IsCustomerInputComplete=False&ProRataPreference=True&AgentId=0&CalcCurGasUsage=16500&CalcCurElecUsage=3300&SavingsThreshold=0&CurrentTotalSpendPerAnum=983.9655000000000000000000000&CurrentGasSpendPerAnum=621.35850000000000000000000000&CurrentElectricitySpendPerAnum=362.60700000000000000000000000&SwitchId=0

SOL23 would be much further down the list!

backfoot

Which is why they have changed it to con the Comparison sites.

The by product is that they can't have it both ways and now they have set it as something the customer is entitled to under the Principal Tand C's.

If a customer just switches for no good reason then they can claim the discounts back.

If there is a unilateral variation, the original terms apply, if a customer elects to switch. Those accrued (and paid) discounts will not be reclaimable.

meggsy

I emailed to make sure we wouldn't be charged the exit fee (£40) as there is nearly a months difference between the supply dates. They replied that I was free to switch as they felt it wasn't fair to charge an exit fee after a price increase. I'm expecting our final bill from npower during the next week or so and will check it with a fine toothed comb !

After reading this thread I might just email tomorrow to enquire about 'conditional discounts' (thanks backfoot)