Npower versus the vulnerable? Court Challenge

chanz4

So if I read this right, when they moved in they didn't want npower as their supplier. But instead of registering for the 28 days period, they threw a fit?

debbie97531

Terrylw1 wrote: »

Check out SLC22.7 (b) which suugests a supplier can give 7 days notice to no longer offer a supply contract where already supplying.

I suspect this is related to the tariff contract i.e. fixed prices for a year

undaunted

chanz4 wrote: »

So if I read this right, when they moved in they didn't want npower as their supplier. But instead of registering for the 28 days period, they threw a fit?

No, they simply bought their first home, moved in and (the leaving party having said they had read the meter informed the supplier of the reading, new occupier etc) waited for a bill.

When it hadn't come after 6 months they identified the supplier and contacted them. Still no terms and conditions were offered and the consumer believed they were engaging only in something of the equivalent of a payg phone contract.

Problems only began when they wished to transfer suppliers some years later.

Terrylw1

I also suggest you check out 7.7 (a) & (b) and. 7.8 which they appear to have failed.

Failure to send out terms on Deemed contracts was rife years ago. In fact, if you asked for a copy it would mean someone hunting down a copy from regulation in some suppliers from my experience, it was that bad!

Here is the link you requested. Regardless of Npower's t&c's, its Ofgem's SLC's. Pick the supplier ones.

http://www.ofgem.gov.uk/Licensing/Work/Pages/licence-conditions-consolidated.aspx

After reading this more thoroughly, I see this as a means to break a Deemed contract, although its not accounted for in the Deemed contracts section. It seems that the SLC's prevent a customer from doing this but give the supplier the right to refuse the business. I don't get this because it can't be due to meter technology as they already supply it. Its a very odd clause indeed!

The issue still stands that there is absolutely no industry process to allow the supplier to de-register themselves giving a 7 day notice.

You can't justify the distributor anyway as it would break loads of customer protection processes which distributors cannot perform or are not obliged to.

You also can't allow a customer to de-register, since they could never register to a new supplier and get free utilities. This would end up being theft cases if it could be proved that a customer has knowingly not registered.

Something you need to consider as well, is the ombudsman part in this. The supplier if given the ability to object to a switch under the terms of SLC14 but its a "may", not "must" clause. The ombudsman could have ruled that the customer could switch. Really, I've seen that done on lower level complaints via an internal decision.

undaunted

Thanks for that defence does indeed include references to 7.7 & 8. Interestingly Npower have sought to argue that they do not need to provide terms of a deemed contract in writing, claiming it to be a creature of statute and outside of all usual consumer protection legilsation. The defence is obviously intending contesting this.

The ombudsman did suggest that the customer could switch if they got the balance below £200. At the time they could not do so though Npower had said they would honour the Ombudsmans finding even after they were no longer obliged to do so.

Why they then didn't when an offer was made is beyond me.
Bizarrely the defendant is now able to show / argue that Npower have spent more in seeking / causing adjournments than was the difference between the offer of settlement made and what they had estimated the bill to be at the time / could object to any transfer upon.

22.7(b) should indeed be helpful as Npower have claimed to the court that a deemed contract could only be ended in 3 specific circumstances - if the defendant entered into a domestic supply contract, ceases to own the property and ceased to occupy the property.

Interesting they are also arguing the disconnection by removal of the fuse does not terminate supply and there need be no consumption for a deemed contract to exist (contrary to Ofgems suggestion)

Terrylw1

undaunted wrote: »

22.7(b) should indeed be helpful as Npower have claimed to the court that a deemed contract could only be ended in 3 specific circumstances - if the defendant entered into a domestic supply contract, ceases to own the property and ceased to occupy the property.

Interesting they are also arguing the disconnection by removal of the fuse does not terminate supply and there need be no consumption for a deemed contract to exist (contrary to Ofgems suggestion)

Removal of a fuse is not classed as disconnection. Removal of a fuse or meter is classed as de-energisation and the supplier plus agents remain registered. This allows it to be re-energised.

Disconnection is only where the MPAN is disconnected due to a) it was spurious, b) no longer required e.g. primary remains but secondary is not needed such as an off peak supply or c) the service is completely removed by the distributor.

In elec, these 3 scenarios "end date" the suppliers registration, this liability to pay the distributor.

Think of it this way, if the supplier was de-registered when a fuse was pulled, no one will put it back in until you have a supplier who appoints a meter operator...so weeks without power. Suppliers can also pull the fuse for debt reasons so if it de-registered them, it could never be done.

There doesn't need to be consumption, that's a regular occurrence where a landlord buys a property for later tenants. Otherwise landlords would be completely exempt on that basis.

If Ofgem stated the opposite of this, then the person who said it is clueless. They may benefit from a chat with Elexon who manage these processes and would completely disagree. It would create gaps in settlement and cause distribute to be out of pocket and also put customers at risk.

In terms of ending a Deemed contract, I guess Npower forgot about switching then...that ends one as does full disconnection as explained above.

I would point of that if disconnected in error (not a physical one at site), the customer remains legally with the supplier at the point of disconnection and the distributor corrects the record. There is an industry process for this. If it was disconnected at site, the customer is "unregistered" however the distributor won't reinstate it until the supplier is registered, plus the supplier needs to fit the meter.

undaunted

Its going to be an interesting argument.

Npower have indeed argued that they have not disconnected supply, merely removed a fuse.

They even cite some old cases which they claim to support this.

The defendant maintains this is not the case and has produced a range of far more recent Ofgem documents which say that there does need to be consumption for there to be a deemed contract and disconnection, removal of fuses, de-energisation etc are all ultimately the same thing.

I've been reading the files at length & would you believe there is even an Ofgem document (dating back to 1999 I think it was) stating that the transfer objection creates monopoly & unfairness & they therefore proposed to remove it.

Terrylw1

Yeah, the transfer objection was considered. Consideration brings in all parties for discussions to determine everyone's beliefs/solutions and then moving it forward.

There are lots of industry governance bodies that constantly send out things like this.

They tightened up objections in the customer favour to form the current SLC. This was because suppliers were stopping anyone who owed more than £50 leaving...even if its not their fault. So, they would have gone all over this again.

In terms of disconnection, I'm talking from an industry viewpoint and my points are from the Master Registration Agreement (MRA) and the Balancing & Settlements Code (BSC) which are licences for trading that cover the processes in the industry. Ofgem's SLC's reference these but can override them if required, however this is just a clause to allow for something that could go wrong.

So, it depends what you are saying. If you are saying that any form of de-energisation is a way to de-register, Ofgem would be opening themselves up for a world of problems. Unless I saw a document, I wouldn't believe that unless a poor remark by someone junior who has no understanding or influence.

I will say, that from dealings with Ofgem people, they aren't always the experts consumers may think they should be. That's because the other industry bodies deal with the far more complex licences.

Got a doc about it? It would be interesting to see if Ofgem have broken the UA terms with it.

Ultimately, the supplier de-registration is just something that currently is logistically impossible. They could easily roll out a new data flow and process, the relevent non Ofgem body updates their licence, etc.

However, who does the safety checks? How does the customer get their fuse put in? How does the distributor invoice when their is no mechanism to recover the consumption?

Even if Ofgem did agree this, they would come under fire from Elexon and each distributor & supplier who loses out. They would also probably have some issues legally over H&S.

So, it would mean a lot of work to ultimately create a rather worthless process.

The solution would be to stop objections and to allow a backdated registration to occur. The latter would need some scenario brainstorming as there could be updates made by the Deemed supplier after the Deemed registration date that the agreed supplier will backdate to and this could incur a charge...which means removing charges...but I don't think this is a biggie.

spiro

Terrylw1 wrote: »

The solution would be to stop objections and to allow a backdated registration to occur. The latter would need some scenario brainstorming as there could be updates made by the Deemed supplier after the Deemed registration date that the agreed supplier will backdate to and this could incur a charge...which means removing charges...but I don't think this is a biggie.

This would cost somewhere in the order of £10-£50,000,000 to change MPAS.

undaunted

I haven't at the moment but will be able to find out. In the meantime as I recall there were several aspects to it, not just some off hand comment by a junior.

There was reference to definitions of terms in legislation and consultation papers which are clearly made and disconnection essentially meaning to stop supply

Ofgem reporting requirements which state disconnections are not to be interpreted as removal of the meter etc but that disconnection, de-energisation, removal of fuse etc must all be included.

In the document re customers in debt and proposals referred to above they suggested Ofgem could not initiate a change in MRA it was for the parties involved to do to do (didn't specify who other than suppliers this includes?) but then went on to suggest that if agreement could not be reached an SLC could however be made to invalidate the MRA. Presumably this was never followed up on.

There were at least two, maybe three documents that referred to a need for consumption for deemed contract.

I would imagine that for a Judge the only questions to determine are law and not industry view point & in response to Npowers challenge to prove that they were legally entitled to have the supply removed upon request the defendant has also produced a Supreme Court Appeal decision that would seem to provide it.

Me thinks the s**t may therefore be about to hit the fan!