British gas price increase 223%

RTF

Hi:
We are by definition a micro business, 15 holiday flats let out. Having some refinancing issues, we unfortunately ran into arrears with British Gas. To "help" us I guess (!?), they now inform us we are out of contract, and unless we immediately settle all our o/s debt with them in full AND pass their new account credit checks (unlikely) we cannot secure a new contract. We have then been moved on to an emergency rate (equates to a 223% price increase). We were repaying slightly more than we are being billed, but at these new rates there is no chance of repaying. Anyone had this experience? Can anyone advise possible useful ideas/ recourses. Thanks.

Man_Overboard_2

RTF wrote: »

Hi:
We are by definition a micro business, 15 holiday flats let out. Having some refinancing issues, we unfortunately ran into arrears with British Gas. To "help" us I guess (!?), they now inform us we are out of contract, and unless we immediately settle all our o/s debt with them in full AND pass their new account credit checks (unlikely) we cannot secure a new contract. We have then been moved on to an emergency rate (equates to a 223% price increase). We were repaying slightly more than we are being billed, but at these new rates there is no chance of repaying. Anyone had this experience? Can anyone advise possible useful ideas/ recourses. Thanks.

Some of the Debt Advice charities also offer advice on Business Debts.

In my very recent experience, you can only benefit by engaging in a full and frank discussion with your creditor. After all, they also face the risk of significant losses, and will gain nothing by forcing you out of business.

Terrylw1

You will remain in a contract with them but its classed as a Deemed contract.

These are notorious for very high rates.

Termination of a micro business customer is no longer than 90 days but it could be pretty short in a debt situation. Only the contracts t&c's will reveal this.

Domestic consumers used to have this problem whereby suppliers would bang in a PPM knowing the cost per kwh was higher hence making it harder to get out of debt. Ofgem has gone some way to stop this.

Sadly, they don't for business customers. You need to argue the fact it is an unfair action. A supplier may not care but you can refer to the ombudsman after 8 weeks of having a complaint in place with them.

There really isn't much in the Ofgem SLC's to help you so you need to make use of standard contract law.

Man_Overboard_2

Terrylw1 wrote: »

You will remain in a contract with them but its classed as a Deemed contract.

These are notorious for very high rates.

Termination of a micro business customer is no longer than 90 days but it could be pretty short in a debt situation. Only the contracts t&c's will reveal this.

Domestic consumers used to have this problem whereby suppliers would bang in a PPM knowing the cost per kwh was higher hence making it harder to get out of debt. Ofgem has gone some way to stop this.

Sadly, they don't for business customers. You need to argue the fact it is an unfair action. A supplier may not care but you can refer to the ombudsman after 8 weeks of having a complaint in place with them.

There really isn't much in the Ofgem SLC's to help you so you need to make use of standard contract law.

Alternatively, try just talking to them - explain that you have 3 wives and 17 children to feed, and that it might be possible to make the youngest of your wives available in lieu of payment....

No? Ok, just talk to them, and take advice from the debt charities

RTF

Thanks Man Overboard. We have taken debt advice, our position is complex. We have had full and frank discussions with British Gas, they have seen our accounts, but yet they persist with what I would call a very aggresive and unreasonable approach. We can only make small additional repayments against the debt. We had to cancel our DD with them because they took £3k out the account without notice, causing absolute carnage on our account.

Terrylw1

So, there you have another issue adding weight to a complaint.

RTF

Thanks Terrylw1. Your take the same as mine, there appears to be no easy recourse for business customers.

Man_Overboard_2

RTF wrote: »

We had to cancel our DD with them because they took £3k out the account without notice, causing absolute carnage on our account

Presumably the bank gave you an immediate refund under the terms of the Direct Debit guarantee

Terrylw1

No easy resource yes, but over the past 7 years there have been numerous businesses stung by Deemed contracts. This was where they expired and no notice had been given but given these reached the media, you might find some articles about case studies incase they can be of help.

dogshome

Whatever the debt situation was, on a Business Contract BG are supposed to give you written notice 60 days before the Expiry Date of the current contract.
You as the customer then have 30 days to either agree a new deal with BG or find a new supplier.

The number of these supposedly posted 60 day notice letters that don't arrive is astounding, but assuming you were getting regular contacts from BG in the months prior to the Contracts end, ask BG for a copy of the letter and proof of posting

RTF

Managed to speak to a nice sensible person yesterday, and they have agreed a normal commercial rate deal through to Nov '13 as long as we stick to a DD at the agreed monthly amount. I would say this was a case of very poor credit collection practices by British Gas staff ... must be working to tight collection targets ... or trying to give us oldies heart attacks .... Thanks for responses.