First Utility new exit fee scam switching tariffs

jblackmore

I've been with F:U for a few years, and have switched to cheaper tariffs with them a couple of times, as energy prices are falling, I figured this was easier than switching suppliers.

F:U have never charged exit fees when switching to a tariff with longer date, and this was specifically stated (quote below).

A couple of weeks ago my bill once again suggested a cheaper tariff, so I clicked to switch (from Dec16 to Mar17 fix - clearly a longer date) - had an email today that they would charge me £60 exit fee's for swapping within FU tariff, so I phoned as I thought this must be a mistake.

Customer services advised they now charge exit fees unless you move from 1 to 2 year or 2-3 year fixes, even if new fix is longer period, they still consider this an 'exit' and charge the fee's ! I said this was a change of terms and conditions, which they say it isn't, despite me having a screenshot of the old terms:

"Customers on fixed price tariffs may be charged an early exit fee when changing to another tariff or switching away from First Utility. These fees will be waived if a longer fixed price tariff with First Utility is selected. More details about the exit fees on a particular tariff can be found in the terms and conditions within the tariff guide."

Really sneaky in my view, as clearly they are having to advise of cheaper tariffs on bills under new regs, but then locking customers into higher prices through exit fee abuse - not sure how anyone would consider this treating customers fairly or acting in an honest and transparent way.

I notice the exit fee's explained on F:U website says "Exit fees are designed to cover the costs we incur if you decide to end your contract early." - would love to see a breakdown of what its costing for me to click between online tariffs and get an email confirming that

victor2

FU by name and FU by nature?

jaybeetoo

jblackmore wrote: »

I notice the exit fee's explained on F:U website says "Exit fees are designed to cover the costs we incur if you decide to end your contract early." - would love to see a breakdown of what its costing for me to click between online tariffs and get an email confirming that

When electricity and gas prices are falling, I bet FU have some long term supply contracts at a high rate so if too many people swap to a cheaper tariff before their plans end, FU could end up with a loss.

footyguy

jblackmore wrote: »

I've been with F:U for a few years, and have switched to cheaper tariffs with them a couple of times, as energy prices are falling, I figured this was easier than switching suppliers.

F:U have never charged exit fees when switching to a tariff with longer date, and this was specifically stated (quote below).

A couple of weeks ago my bill once again suggested a cheaper tariff, so I clicked to switch (from Dec16 to Mar17 fix - clearly a longer date) - had an email today that they would charge me £60 exit fee's for swapping within FU tariff, so I phoned as I thought this must be a mistake.

Customer services advised they now charge exit fees unless you move from 1 to 2 year or 2-3 year fixes, even if new fix is longer period, they still consider this an 'exit' and charge the fee's ! I said this was a change of terms and conditions, which they say it isn't, despite me having a screenshot of the old terms:

"Customers on fixed price tariffs may be charged an early exit fee when changing to another tariff or switching away from First Utility. These fees will be waived if a longer fixed price tariff with First Utility is selected. More details about the exit fees on a particular tariff can be found in the terms and conditions within the tariff guide."

Really sneaky in my view, as clearly they are having to advise of cheaper tariffs on bills under new regs, but then locking customers into higher prices through exit fee abuse - not sure how anyone would consider this treating customers fairly or acting in an honest and transparent way.

I notice the exit fee's explained on F:U website says "Exit fees are designed to cover the costs we incur if you decide to end your contract early." - would love to see a breakdown of what its costing for me to click between online tariffs and get an email confirming that

I'm certainly no fan of FU, but I think we need to be a little balanced here.

They cannot change the terms of a deal you have agreed to (unless they let you leave for free)
So presumably the terms you've stated refer to an old tariff, one you have since transferred from.
If I'm correct, then you need to refer to the termns you agreed to when you agreed to transfer tariff.

(If the terms are still as above, then I feel sure you would win if it came to a formal complaint - might need the ombudsman to eventually assist you though)

As regards charging an early exit fee for switching tariff, there are many suppliers that do this. It is not a scam if it is clear from the outset in the terms that this will occur.

System

Looking at their ts and cs (Oct 2015), First Utility says this on the subject of exit fees

8.1If your contract with us has a fixed term period and you terminate the contract before this period has expired, you may have to pay an early exit fee. We won’t extend the duration of any period of time for which you must stay on the tariff you have signed up to without your agreement.

jblackmore

footyguy wrote: »

So presumably the terms you've stated refer to an old tariff, one you have since transferred from.
If I'm correct, then you need to refer to the termns you agreed to when you agreed to transfer tariff.

Their exit fee policy didn't seem to be part of any tariff it appeared to apply to any internal switches with longer dates, certainly I switched tariffs in Dec14, July15 and Oct15 as prices were falling with no issue.

It seems F:U changed their exit fee 'policy' sometime in December, but this wasn't notified as a change of terms, so I had no way of knowing this.

My January bill advised I could save money (£34pa) by swapping to their March17 tariff, so I requested to swap on 15th Jan, there was certainly no mention of exit fee's then, first I knew was email today advising of £60 charge - which I don't think is very transparent as £34 saving turns into a £26 increase from moving to a cheaper tariff at their recommendation

F:U seem to agree with you that as they always said they 'may' charge exit fee's, but would waive this for longer terms, that no longer waiving this isn't a change in terms, but I don't think that's very honest and transparent, as clearly previously there was no exit fee if you weren't moving to another supplier or shortening the term of tariff which seems fair and reasonable to me.

wavelets

jblackmore wrote: »

...

I notice the exit fee's explained on F:U website says "Exit fees are designed to cover the costs we incur if you decide to end your contract early." - would love to see a breakdown of what its costing for me to click between online tariffs and get an email confirming that

LOL - if that's all there really was to it.

When you entered the original fixed price contract, the supplier needed to purchase that energy on the wholesale market at a fixed price (or at least reserve it from a purchase they have previously made)

When you now effectively cancel that contract early, the supplier is left with a load of energy they need to try and sell ... and at a time of falling wholesale prices, the energy the need to sell they have paid a relatively lot of money for.

Ok, it gets a bit more complicated as you plan to remain with the supplier, but they bought the energy at a price based on what you would pay for it. Now you are not going to be paying as much ... but their costs are the same. Hence an early exit fee.

wavelets

jblackmore wrote: »

...
It seems F:U changed their exit fee 'policy' sometime in December, but this wasn't notified as a change of terms, so I had no way of knowing this....

As footyguy has said, they cannot change the terms of the contract you agreed to (except in certain circumstances)

But when you changed tariff, are you sure there was no difference in the terms of the old tariff compared to the new tariff? The supplier does not need to highlight such differences, just provide you with the terms which you would certainly have to agreed to.

jblackmore

Clearly I'm outvoted, I still think this is sneaky.

I've cancelled the swap, so won't be paying the fee, but I still feel bill stating 'you can save £xx by moving to tariff Y' when actually this will cost you more isn't very transparent.

I guess it depends how low your expectations are from energy suppliers/ofgem

System

I had this discussion in reverse with Ovo when they told me that I was on their lowest fixed tariff. The truth was that I could save by switching tariffs, but the saving was less than £60. Taking the termination fee of £60 into account would have resulted in a higher annual cost.

FWIW, when informing customers of savings, I think that First Utility uses the OFGEM-mandated inflated savings methodology.

The_Reaper

Posted about this recently to try and warn others about it.

Im switching from them now.