When do you pay a cancellation fee?

JesseJames_2

First Utility iSave Fixed v18 May 2015
I can switch from 12th April without cancellation fees.

When going thru Uswitch just now
"Your plan has a £60 cancellation fee!"
"If you switch today you'll pay a cancellation fee."

I thought the cancellation fee was the date of the actual switch, not the date of application - or are they just playing safe.

Who knows for definite?

macman

Correct, it's the date of the switch, you remain in contract until that date. Since the duration of a switch is not fixed, they are indeed playing safe by warning you.

System

macman wrote: »

Correct, it's the date of the switch, you remain in contract until that date. Since the duration of a switch is not fixed, they are indeed playing safe by warning you.

The OFGEM rules are as follows:

Fixed term contracts

Suppliers will be banned from increasing prices, or making other changes to fixed term contracts which are to the disadvantage of a customer. The only exceptions to this are “tracker” tariffs that follow an independent index over which the supplier has no control, or structured price increases set out in advance which are fully in line with consumer protection law. This new rule applies to any contracts entered into on or after July 15 2013.

Suppliers will be required to notify customers that their current fixed-term is coming to an end between 42 and 49 days before the contract ends.

Between this notification period and the end of the fixed term contract, suppliers will be banned from charging a termination fee should the customer decide to switch.

Suppliers will be banned from automatically rolling a customer over onto a further fixed term contract.

Instead suppliers will be required to default customers to an evergreen contract if the customer takes no switching action before the end of their fixed-term contract (this default contract must be the cheapest evergreen tariff with the supplier from 31st March 2014).

Under these rules, I can apply to switch 49 - 42 days before the end of my fixed term contract which, say has a £60 dual fuel exit fee. Let's say that I apply to switch at the 42 day point and under the new switching process the switch goes through in 17 days. Or, put another way, the switch takes place 25 days before the end of my current tariff. I will not incur any exit fees.

JesseJames_2

Thanks for the confirmation - my 49 days is Sunday 12 April (from 31st May)

I guess my next question is, will there be any chance the switch will go thru by next Sunday (i.e. 4 working days) if I apply today, or is it advised to wait until the 12th.

System

If you apply to switch before the 49 day point, you will be in breach of contract and exit fees will be applied. The safest thing to do is to wait until you receive the 49- 42 day letter/e-mail from your present supplier. Remember the switch will take at least 17 days (14 day cooling off period plus 3 days to switch). There is no rush. If you apply to switch a day before your current contract ends then you will remain on your present contract rates until the switch goes through. One caveat though, if you switch via a 3rd party then you have to allow them time to contract your new supplier before your current contract ends or you will end up on your current supplier's standard/variable tariff until the switch goes through.

JesseJames_2

Cheers

"Please bear in mind that if you do leave
before 12 April 2015 we may charge an early termination fee of £30 for your gas and £30 for your electricity"

...I'll apply next Sunday 12th.