Avro - What happens if they go bust? Does the new provider keep you on same price?

FIRSTTIMER

I am just a third into a 12 month fixed deal and wondered what actually happens if another supplier has to take over? Is my 12 month fixed price honoured or do I go to a new provider and move to standard variable and then have to switch to a better deal?

PennineAcute

Sometimes the former, more than likely, the latter.

Biggus_Dickus

FIRSTTIMER wrote: »

I am just a third into a 12 month fixed deal and wondered what actually happens if another supplier has to take over? Is my 12 month fixed price honoured or do I go to a new provider and move to standard variable and then have to switch to a better deal?

If an energy firm goes bust OFGEM will appoint another energy company to take over the gas/leccy supply for all the domestic customers of the defunct company.

OFGEM refer to the newly appointed company as the ‘Supplier of Last Resort’ (SoLR). The SoLR will usually(??) put all these ‘new’ customers on to their Standard Variable Tariff (SVT) which is normally their most expensive tariff. However, SVT’s do not have ‘exit’ fees,...when your move to the SoLR is completed you are free to negotiate a switch to a different tariff (or supplier) of your choice at any time.

Your gas/leccy supply will always be 100% available and will not be switched off or interrupted at any point,...not even for a short period.

Any outstanding ‘credit’ that you are owed by the defunct company will (eventually!) be paid back to you from an OFGEM contingency fund,...(I believe it’s sometimes funded by the the SoLR themselves!) ...so you’ll never be out of pocket,...theoretically anyway.

It’s obviously an unwanted pita for customers who are affected when an energy firm goes bust, but the OFGEM SoLR process appears to work quite well (most of the time!),... but it isn’t without occasional issues;...one such issue can be that the SoLR can themselves struggle to cope with a large (and instant) influx of new customers,...which in turn affects service levels to their own existing (and new!) customers.

Unfortunately, the SoLR process has been invoked quite often in recent times,...13 energy suppliers went bust between Jan’18 and Feb’19

cranford

I have a credit of about £120 with Avro and can find a switch that would cost me £40 more for a 18 month contract. Am I right in thinking that if Avro go bust after I have switched and have not paid me back my credit then I can whistle for it? The credit could reach £230 if Avro don't stop taking DD's after the switch as seems to be the case with other posters.

Quentin

If you leave a company and go elsewhere leaving a credit balance and the company goes down at some time prior to refunding the money owed then you would be a creditor. (As opposed to staying and getting transferred after they went down when any credit would be paid by the company you were transferred to)

A way to avoid the issue if you are worried the supplier may go down would be to cancel any direct debit and use up the credit then move

Biggus_Dickus

cranford wrote: »

I have a credit of about £120 with Avro and can find a switch that would cost me £40 more for a 18 month contract. Am I right in thinking that if Avro go bust after I have switched and have not paid me back my credit then I can whistle for it? The credit could reach £230 if Avro don't stop taking DD's after the switch as seems to be the case with other posters.

Theoretically you should still get your full credit refunded,...however!!

... if you’ve recently switched away before a company goes bust but haven’t yet received your final bill/credit refund you will possibly/probably(??) find yourself in economic limbo because you are technically no longer a customer of the defunct company and therefore cannot be switched under the protective umbrella of the OFGEM ‘Supplier of Last Resort ‘ process.

There have been a number of forum members who have found themselves in the invidious position of having to negotiate with the Official receivers of the defunct company,...it can, apparently, get quite complicated.:(

SnowMan

cranford wrote: »

I have a credit of about £120 with Avro and can find a switch that would cost me £40 more for a 18 month contract. Am I right in thinking that if Avro go bust after I have switched and have not paid me back my credit then I can whistle for it? The credit could reach £230 if Avro don't stop taking DD's after the switch as seems to be the case with other posters.

This is what it says on the OFGEM website.


https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/extra-help-energy-services/ofgem-safety-net-if-your-energy-supplier-goes-out-business

I’m already in the process of switching supplier and it’s not yet complete. Will my switch go through and is my credit balance protected?

You don’t need to worry. If it’s already in progress, you will continue to be moved to the new supplier you have chosen. You should not need to do anything.

When your switch completes and the account with your old supplier is closed, you may be owed money if your account had built up credit with the old supplier. Once the switch is complete your direct debit with your old supplier should be cancelled. However, if this has not happened you may need to cancel the direct debit with your old supplier. We'll look to appoint a supplier who will pay back money owed to you that's outstanding from a closed account.


I recently closed my account. Will I get back the credit I’m owed?

We’ll look to appoint a new supplier who will pay back money due to customers that's outstanding from closed accounts. Costs for energy you have used but have not yet been billed for will be deducted from your account balance.





The wording "we will look to appoint" suggests you should be OK, but leaves open the possibility they will "look to appoint" not find anyone and you will lose the credit.

How great that possibility is that you won't get your credit back can be debated. Of course if OFGEM were to allow that, they would be sending out the message that your credit is always safe unless you switch, which is against their message that switching is a good thing. And OFGEM telling people "not to worry" would be negligent advice in my view.

When I instigated a switch away from Avro recently, they sent me a message asking me to confirm I did want to switch away. I found that pretty irritating; I shouldn't have to confirm that I am switching away. Anyway I did confirm that by email. They replied to say they couldn't identify my account, even though my reply contained their email with my name in it. I replied again and they have said that they will set my direct debit to zero. So I won't cancel the direct debit, but if Avro do take a payment after the switch I will get the payment back under the direct debit guarantee using their email as evidence that the payment is unauthorised. Had I not received that email I would have cancelled the direct debit. I am in credit, and will be about £50 in credit at the time of the switch by the way.

Benight

Biggus_Dickus wrote: »

Theoretically you should still get your full credit refunded,...however!!

... if you’ve recently switched away before a company goes bust but haven’t yet received your final bill/credit refund you will possibly/probably(??) find yourself in economic limbo because you are technically no longer a customer of the defunct company and therefore cannot be switched under the protective umbrella of the OFGEM ‘Supplier of Last Resort ‘ process.

There have been a number of forum members who have found themselves in the invidious position of having to negotiate with the Official receivers of the defunct company,...it can, apparently, get quite complicated.:(

Could you point us in the direction of these forum members of which you speak, or more importantly, which supplier were they with ? :huh:

As far as I know, where Ofgem has appointed a SoLR following the collapse of an energy supplier, that SoLR has always been responsible for refunding any balance owed to the customer by the collapsed energy supplier, including customers of the collapsed supplier at the collapse and former customers who had already left the collapsed supplier but was still awaiting settlement of their account.

As part of the bidding process to Ofgem to be appointed thge SoLR, the supplier indicates how they plan to fund any credit due to existing and former customers of the collapsed supplier. Some may agree to fund it entirely themselves, whilst others may indicate they will only do so if they can later call upon the Ofgem to partly or wholly fund such payments; this is then effectively funded by a levy on other energy suppliers.
(as you indicated in post#3)

Biggus_Dickus

SnowMan wrote: »

This is what it says on the OFGEM website.


https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/extra-help-energy-services/ofgem-safety-net-if-your-energy-supplier-goes-out-business

I’m already in the process of switching supplier and it’s not yet complete. Will my switch go through and is my credit balance protected?

You don’t need to worry. If it’s already in progress, you will continue to be moved to the new supplier you have chosen. You should not need to do anything.

When your switch completes and the account with your old supplier is closed, you may be owed money if your account had built up credit with the old supplier. Once the switch is complete your direct debit with your old supplier should be cancelled. However, if this has not happened you may need to cancel the direct debit with your old supplier. We'll look to appoint a supplier who will pay back money owed to you that's outstanding from a closed account.


I recently closed my account. Will I get back the credit I’m owed?

We’ll look to appoint a new supplier who will pay back money due to customers that's outstanding from closed accounts. Costs for energy you have used but have not yet been billed for will be deducted from your account balance.





The wording "we will look to appoint" suggests you should be OK, but leaves open the possibility they will "look to appoint" not find anyone and you will lose the credit.

How great that possibility is that you won't get your credit back can be debated. Of course if OFGEM were to allow that, they would be sending out the message that your credit is always safe unless you switch, which is against their message that switching is a good thing. And OFGEM telling people "not to worry" would be negligent advice in my view.

When I instigated a switch away from Avro recently, they sent me a message asking me to confirm I did want to switch away. I found that pretty irritating; I shouldn't have to confirm that I am switching away. Anyway I did confirm that by email. They replied to say they couldn't identify my account, even though my reply contained their email with my name in it. I replied again and they have said that they will set my direct debit to zero. So I won't cancel the direct debit, but if Avro do take a payment after the switch I will get the payment back under the direct debit guarantee using their email as evidence that the payment is unauthorised. Had I not received that email I would have cancelled the direct debit. I am in credit, and will be about £50 in credit at the time of the switch by the way.

Good post that! :T

The question of cancelling your Direct Debit before you receive your final bill/credit refund has been debated quite often on here.

The perceived wisdom seems to be that cancelling your D/D is a no-no because it can, in certain circumstances, de-rail the switch to your new energy supplier if your previous supplier is unable to access your account when they attempt to settle your final bill;

...however, given the surfeit of Energy companies going bust in recent times I guess the question of cancelling your D/D is now more moot than ever it was. :doh:

Biggus_Dickus

Benight wrote: »

Could you point us in the direction of these forum members of which you speak, or more importantly, which supplier were they with ? :huh:

As far as I know, where Ofgem has appointed a SoLR following the collapse of an energy supplier, that SoLR has always been responsible for refunding any balance owed to the customer by the collapsed energy supplier, including customers of the collapsed supplier at the collapse and former customers who had already left the collapsed supplier but was still awaiting settlement of their account.

As part of the bidding process to Ofgem to be appointed thge SoLR, the supplier indicates how they plan to fund any credit due to existing and former customers of the collapsed supplier. Some may agree to fund it entirely themselves, whilst others may indicate they will only do so if they can later call upon the Ofgem to partly or wholly fund such payments; this is then effectively funded by a levy on other energy suppliers.
(as you indicated in post#3)

Fair question,...I probably could do if I was inclined to spend the time searching,... it’s often difficult to remember such specific details. As with any post, my comments can be taken verbatim,...or dismissed completely if one wishes.

However, SnowMans’s comments in post#7 are very insightful, imho, and seem to reflect the issues that some forum members have encountered.,...even though I can’t remember the names of said members,... or the energy companies they were with.:)

brewerdave

SnowMan wrote: »

The wording "we will look to appoint" suggests you should be OK, but leaves open the possibility they will "look to appoint" not find anyone and you will lose the credit.

How great that possibility is that you won't get your credit back can be debated. Of course if OFGEM were to allow that, they would be sending out the message that your credit is always safe unless you switch, which is against their message that switching is a good thing. And OFGEM telling people "not to worry" would be negligent advice in my view.

I asked the question some time ago ,re the possibility of nobody bidding for the business of a defunct Company. I was assured at the time that OFGEM had the power to co-opt/compel a Utility supplier to take over the affected customers, if no bids appeared.


Re a later comment from Benight on credits due from a failed supplier - the problem might arise if the SOLR have agreed a credit with the administrators BUT the customer thinks he has been short changed by the failed Company.

I currently have that situation with the failure of One Select and the SOLR ,Together Energy.
My latest phone conversation with TE suggested that they wanted me to deal with the One Select administrators to get the credit balance altered!!:mad:
I asked for that in writing but nothing has appeared as of yet!