Response from OFGEM RE 28 Day rule

BexTech

Thank you for your email.

The 28 day rule required suppliers to put a term in supply contracts
allowing domestic customers to terminate the contract by giving 28 days
notice. It did not prevent suppliers offering long term contracts, or
from charging customers a termination fee if the customer wanted to
switch before the end of a fixed term. The removal of this rule will
not necessarily result in changes to existing customer contracts and
customers cannot be forced to accept changes to their contracts.
Suppliers have to notify customers of any changes they intend to make
and a customer can choose to switch if they do not agree with these
terms.

The change in the 28 day rule will allow suppliers to offer contracts
with longer notice periods, but they will only do so if they think their
customers want them. Evidence suggests that different customers want
different kinds of contracts; for example there are currently a large
number of customers who have chosen contracts that offer fixed prices
for up to two years (which offer the security of a guaranteed price for
a set period). However, if customers value the ability to switch on 28
days notice, then they have the ability to move to a supplier offering
that type of contract. Suppliers will need to offer different contracts
to ensure they remain competitive.

In the past, some suppliers have offered fixed term contracts with
termination fees. These have not proven popular with customers and as a
result suppliers have dropped their termination fees for many domestic
contracts. This demonstrates that if suppliers offer unattractive
contract terms, customers will decline to accept them and may switch
their supplier.

Where suppliers want to offer more added value services to customers,
such as smart metering or energy efficiency products, some customers may
be happy to sign up to longer periods of notice if this allows them to
get a more sophisticated energy service product. For example, where a
supplier installs a microgeneration unit in the customer's home, it may
want its contract to provide some protection against the customer
immediately switching to another supplier. In this case the supplier
would lose the benefit of its investment and the customer may have to
return the equipment to the supplier.

The removal of the 28 day rule does not prevent a customer from moving
to another supplier. Provided that any outstanding debt has been
settled, customers are free to switch to a supplier of their choice.
However, just like with any contract a customer enters in to, for
example mobile phones or broadband internet services, customers need to
check the contract terms to establish the circumstances under which they
may switch supply.

I trust this aids in your enquiry.