MSE News: British Gas charges customer exit fees to switch tariff...

edited 5 September 2017 at 12:03PM in Energy
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edited 5 September 2017 at 12:03PM in Energy
A MoneySaver who switched away from British Gas to a rival energy provider has been charged £40 in exit fees - even though he completed his switch within the last 49 days of his energy fix, when exit fees should be waived...
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'British Gas charges customer exit fees to switch tariff WITHIN penalty-free switching window'
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  • davep99davep99 Forumite
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    There's nothing in the Cheap Energy Club switching from current (British Gas) deal FAQs about the 49 day rule. Could you add this info to the FAQs or a link to this article?
  • From the FAQs:

    "My fix is ending, if I switch now, will I be charged an early exit fee?

    Energy suppliers are banned from charging exit fees when you have less than 49 days to go till the end of your tariff. These are rules set down by the energy regulator, Ofgem, so suppliers do have to stick to them. So stay within these timeframes and you shouldn't be charged."
  • nic_cnic_c Forumite
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    The article was because someone started the switch before the 49 days, but it completed within 49 days. So it's a question of what date matters. Especially considering you can have a switch completed 20 days AFTER your deal ended and still maintain the deal tariff so long as the switch was initiated and the old supplier informed by your new supplier the switch was occurring.

    So which date is important regarding exit fees, the date the switch starts or the date the switch completes?
  • dogshomedogshome Forumite
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    It's the date the new supplier starts to supply Elec/Gas
  • SystemSystem Forumite
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    nic_c wrote: »
    The article was because someone started the switch before the 49 days, but it completed within 49 days. So it's a question of what date matters. Especially considering you can have a switch completed 20 days AFTER your deal ended and still maintain the deal tariff so long as the switch was initiated and the old supplier informed by your new supplier the switch was occurring.

    So which date is important regarding exit fees, the date the switch starts or the date the switch completes?

    As far as EXIT FEES are concerned, the supplier has a Licence Condition to inform customers in the period 49 to 42 days before contract end that a fixed term contract is coming to an end. On receipt of this notification, the supplier must not charge exit fees if the customer initiates a switch. Exit fees have nothing to do with the date that the new supplier transfers your supply.

    From the Ofgem website:

    Quote: 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. Unquote (2013)

    Do not confuse the above with tariff price protection. If a supplier is notified in the period up to 20 days after the end of a fixed contract - via the energy network - that a transfer process has been initiated, then customers have tariff price protection provided the transfer goes through in a reasonable period of time.

    It is also worth noting that Ofgem is currently consulting with suppliers about a change in the Regulations relating to the end of fixed term contracts:

    Quote. We are proposing these modifications because we want to give domestic suppliers flexibility to roll their customers onto tariffs other than the standard variable tariff at the end of existing fixed-term supply contracts. Our proposal will enable suppliers to offer customers better value rollover tariffs, allowing them to differentiate themselves and provide better deals for customers if they choose. At the same time, our proposal will continue to provide protections for consumers who choose to switch to fixed-term tariffs. Unquote (Aug 2017)
  • nic_cnic_c Forumite
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    So if a customer decides to switch before the 49 days, knowing that it will take 21 days and they will be inside the 49 days when switch happens then the exit fees were correctly imposed as it was initiated before the 49 days. It's the initiation not completion date that matters - the price protection is the same, but it depends when your new supplier tell your old supplier the switch has been initiated.

    If I understand correctly :-)
  • SystemSystem Forumite
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    nic_c wrote: »
    So if a customer decides to switch before the 49 days, knowing that it will take 21 days and they will be inside the 49 days when switch happens then the exit fees were correctly imposed as it was initiated before the 49 days. It's the initiation not completion date that matters - the price protection is the same, but it depends when your new supplier tell your old supplier the switch has been initiated.

    If I understand correctly :-)

    The Supply Licence is the Supply Licence. In Law, you have signed up to a fixed term contract that has exit fees. Ofgem has modified the terms of your contract with the 49/42 day provision. If you are really bored, then read the relevant conditions from page 134 of the Supply Licence. FWiW, Which's interpretation of the rule is as follows:

    When suppliers can’t charge you an exit fee

    Energy providers can’t charge you an exit fee when your fixed deal approaches its end, even if your tariff has one attached to it. Your energy supplier should notify you that your fixed-term tariff is coming to an end 42 to 49 days before the end of your contract. From this point until the end of your contract, you cannot be charged an exit fee if you switch.

    Read more: http://www.which.co.uk/news/2015/05/how-to-avoid-paying-an-exit-fee-when-you-switch-energy-tariffs-401370/ - Which?

    The 'risk' that you run of choosing a supplier that is signed up to 17 day switching is that to achieve this transfer timescale it needs to initiate your transfer within the cooling off period. It follows that your supplier could well be notified that a transfer is progress before it has issued the 49/42 day notification. This may be construed as a situation which could contractually incur exit fees. I know that others will argue that this isn't a problem.

    Why the rush? As your next contract is likely to be more expensive, why not wait until you are in the waiver window?
  • CardewCardew Forumite
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    Hengus wrote: »
    Why the rush? As your next contract is likely to be more expensive, why not wait until you are in the waiver window?

    In my case I applied for the 2 year Ovo fix on 06 Sept - and I switch on 26 Sept(confirmed by BG and Ovo)

    My 'rush' was in case the Ovo deal was withdrawn without notice; as has happened with other Companies/tariffs.

    As it happens MSE gave us a few days notice of the Ovo deal finishing so I could have delayed switching by a week.
  • SystemSystem Forumite
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    Cardew wrote: »
    In my case I applied for the 2 year Ovo fix on 06 Sept - and I switch on 26 Sept(confirmed by BG and Ovo)

    My 'rush' was in case the Ovo deal was withdrawn without notice; as has happened with other Companies/tariffs.

    As it happens MSE gave us a few days notice of the Ovo deal finishing so I could have delayed switching by a week.

    Fair enough.
  • nic_cnic_c Forumite
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    I was going to switch to GNE, though their V8 tariff has now been replaced by a V9, which is still okay for me - their unit rates have gone up, but they've slashed their standing charges by a third. However the new Avro now comes in cheaper and no exit fees too. I'm not sure how often they change tariff's but one would assume they would be there for at least a month??

    The question then, is how close do I leave it. They say aim to switch in 21 days, so is doing it a day (or maybe 2) before the collective fix okay? I can't see anywhere where Avro state when they tell your old supplier of the switch. I'm about £30 in credit with BGas so shouldn't be any delay
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