Could You Pay Less?

Legacy_user

I challenged my energy company about a statement on my latest bill which states unequivocally that I am on its cheapest tariff. I am not. If I was to 'tariff hop' to the latest version of the XXX Energy tariff it would cost me £60 ( loss of online discount) to do so for a saving of about £48 per year. That said, I might take the view that paying £12 for the security of a new lower priced fixed deal is worth it.

The Company's response was as follows:

When you signed up you chose the cheapest plan available at the time- XXX Energy. Therefore on your statement we are advising you of this fact when we refer to you being on the cheapest similar plan.

We do not advise you to be on our cheapest rates at the moment as that would be breaking the terms of the contract you signed up to.

Ugh!! The slight irony here is that breaking the terms of a fixed contract is possible at anytime, and the Company concerned has no exit fees for doing so. So 'Could you Pay Less' is a complete waste of ink and paper.

D_M_E

Is the new, cheaper, tariff also online? If it is, will you not also get the discount for an online tariff and, as a result, save a bit more than £12 - or has your energy company really stopped the discount for online tariffs?

Edit - are they saying you would have to repay the discount for your current tariff, or that you would not get it for the new tariff if you switched?

What does it say about the discount in the terms and conditions for your current tariff?

System

If I go to MSE CEC, or any other comparison site, it shows a tariff of the same name (different version) which is £48 per year cheaper than the tariff that I am on. No problem with that. My problem is that my statement states very clearly that:

Our cheapest similar gas tariff
Better Energy (all online)

You're already on our cheapest similar tariff (YES I AM)

Our cheapest overall gas tariff
Better Energy (all online)

You're already on our cheapest overall tariff (NO I AM NOT)

Both the above statements cannot be correct just because a supplier decides to give different tariffs the same name. Different in the sense of different standing charges and unit rates.

If a fixed tariff has, say, exit fees of £60 and the latest version of the same named tariff would save me £70, then I might choose to change just to get a £10 overall saving and a longer term fix. My supplier doesn't charge exit fees but it discourages tariff hopping with a termination fee equivalent to the loss of the online discount (which just happens to be £60). This 'fine' can be avoided by switching away for a least 3 months.

None of the above changes the material fact that I am not on my supplier's cheapest tariff. The other considerations are secondary to that fact. I have asked consumer affairs at OFGEM for a view.

backfoot

Hengus wrote: »

My supplier doesn't charge exit fees but it discourages tariff hopping with a termination fee equivalent to the loss of the online discount (which just happens to be £60). This 'fine' can be avoided by switching away for a least 3 months.

Can it be done even quicker?

System

No. The contract ts and cs have been re-worded over the past 6 months. A termination fee is now defined as £60 - before it was the loss of the online discount (£60)

10. Cancelling your contract early
10.1. You do not have to pay us a Termination Fee if:

10.1.1 you are leaving Energy which means you don’t initiate a switch back to Energy within 3 months of initiating the switch away);

10.1.2 you are moving from a Variable Plan to a Fixed Plan;

10.1.3 you are moving from one Variable Plan to another; or

10.1.3 you are moving from Better Energy to Greener Energy.

In all other circumstances, Energy reserves the right to charge a Termination Fee, and this clause 10.1 will survive termination of your contract.

CashStrapped

This is why I always check if I can freely hop tariffs with the same company without incurring any penalty.

I know Scottish Power gets a bad rep but this is my 10th tariff hop in as many months onto a newer and cheaper tariff.

It sounds like they are playing semantics with exit penalties to some extent, even if they don't charge you for leaving them completly.

I thought energy companies could not use the same name for multiple tariffs. They may be getting round this by using their main tariff header as a brand and only when you look at the small print does it call it v10 or somthing.

No other tariffs to switch to elsewhere?

backfoot

Thanks Hengus.I didn't know that.:money:

It look like OVO, who I think you are talking about, have reacted to feedback from people like me, who have switched because they do not allow tariff hopping.

Introducing 'conditional' exit fees rather than 'loss of online discount' is much clearer. If 3 months is their condition, I don't consider that unreasonable.

It is also tied in with your thread I think and whilst I understand your point about accuracy of their statement, we have to mindful that several Suppliers are offering their fixes without exit fees.

So as customers , some of us, including myself have wanted the best of both worlds. i.e. a one way fix, which is a bit cheeky.;)

System

I am not complaining about the ts and cs. These are an essential part of all contracts. My concern is that some may look at the statement on the bill about 'Could you pay less?' and take what is written at face value. Enough said; caveat emptor.