Protection for domestic customers moving to property with business suppliers?

KnittingAmy

Two months ago, we bought a house that had been used by a college for their students. As such, the energy was provided by business only suppliers: Corona for gas and Opus for electricity. We were really shocked to see the charges (Corona - standing charge around £3.70 per day, unit charge 14p; Opus standing charge £4.00 per day, unit charge 80p in March, though the Opus deemed rates, strangely, lowered in April).

It took us a month and a half to switch our gas from Corona and because of an issue with the national database (which had been given incorrect information about when we 'joined' Opus), it took two months to be back on domestic electricity.
We will be contacting the companies to express our dissatisfaction over the delays in their allowing us to transfer to a domestic supplier, but it seems like there is potentially a wider problem.

Since you are not able to switch suppliers within 28 days of a previous switch, anyone moving into a new home that has used business providers before would seem to be stuck with paying these deemed rates. Comparing what we paid for the month of March with what we would have been on with a residential deemed tariff, we paid more than £200 above what the standing charge would have allowed. If the average daily gas usage in a 2 bedroomed home is around 660 units for that month, that's an additional £66 above what the domestic price cap allows. If around 170 electricity units are used, that's a further £98.

Sorry this has turned into a rather lengthy post but, while we are fortunate that we can absorb this into the budget we had for working on our house (though of course, we'd really rather not have to), I hate to think of the impact an unavoidable, extra expense of over £350 could have on most people when moving house, especially at the moment when there are so many other challenges. Does anybody know of somewhere to raise this issue? It seems unbelievable that there is this apparent loophole which prevents some people from the protection of the price cap.

MWT

It isn't a 'loophole' it is the consequence of buying former business premises and just needs to be part of your due diligence during the purchase to identify the problem and prepare for it.

The 28 day switching limit shouldn't apply to the change of meter details as you are not switching supplier when you move into  the new premises just taking over on a deemed supply, but yes, it can take a while to make the change.

Robin9

I would go this way and copy to your MP

Department of Business, Energy and Industrial Strategy 

1 Victoria Street
London
SW1H 0ET
United Kingdom

Email

enquiries@beis.gov.uk

rp1974

Businesses are supposed to be competent in such matters and don't have the same protections in place as domestic consumers do,theres no loophole,apparent or otherwise it's standard practice for business supply as opposed to domestic.
You knowingly or unknowingly bought the property and as such entered a deemed energy supply with whomever was already in place.

Harsh as this may sound a little due diligence beforehand would've flagged this up and should've been sorted before you were responsible for it.
Guessing estate agents and or surveyors don't bother,or aren't responsible for checking these sort of things out either,are they?.

KnittingAmy

Thanks for the replies. Regarding due diligence, we were aware that the suppliers were business-only before we exchanged contracts. This wasn't flagged by the conveyancer, but when we didn't recognise the supplier names on the TR6 form, we googled them.

We got in touch with one of the companies and were given the impression that it would be a straightforward 'normal' process switching provider. So we were aware that we were likely to end up with some additional expense on their deemed tariff (and perhaps some time on the telephone!). We did not expect it to last quite so long and run into hundreds of pounds additional expense, though we are lucky to have contingency to cover that.

My concern is that it would be very easy for someone to go into that situation without any warning (there was a post on here many years ago from a tenant who found their new property was supplied by a business provider and their landlord was shrugging off responsibility). It seems to me that the protection of the domestic price cap ought to apply based on the user, rather than the previous use of the property.

QrizB

I remember your previous thread:

https://forums.moneysavingexpert.com/discussion/6343549/trapped-on-business-gas-electricity-in-new-home

I'm glad you've got everything sorted out now, even if it did prove to be expensive. Hope you're settling in well to your new home

KnittingAmy

@QrizB Getting nicely settled in now, thanks! 

MWT

KnittingAmy said:

It seems to me that the protection of the domestic price cap ought to apply based on the user, rather than the previous use of the property.

Unfortunately the way that suppliers are licenced makes it difficult to handle that way, but perhaps there is some mileage in requiring vendors selling property as residential to ensure the meters are properly registered as residential as well...

I assume the property in your case was advertised and sold as residential, not business?

Robin9

MWT said:

KnittingAmy said:

It seems to me that the protection of the domestic price cap ought to apply based on the user, rather than the previous use of the property.

.................., but perhaps there is some mileage in requiring vendors selling property as residential to ensure the meters are properly registered as residential as well...

@MWT Where do you think that responsibility should lie ?

I think there is quite a few issues with premises that are on business tariffs but ought to be domestic. @KnuttingAny is one; a recent poster had issues with a holiday chalet; others being sub-metered from shops.

KnittingAmy

MWT said:

KnittingAmy said:

It seems to me that the protection of the domestic price cap ought to apply based on the user, rather than the previous use of the property.

Unfortunately the way that suppliers are licenced makes it difficult to handle that way, but perhaps there is some mileage in requiring vendors selling property as residential to ensure the meters are properly registered as residential as well...

I assume the property in your case was advertised and sold as residential, not business?

Yes, the property is residential and was advertised as such (former student house). We actually bought from a private owner (there had been some agreement whereby the college leased it from them over many years, though we do not know the details) so were a little surprised when we found out about the energy suppliers.
I agree that the way meters are labelled business/domestic creates a challenge here. In particular, the fact that only the existing (in our case business) supplier can relabel the meter from business to domestic. It took several weeks for either company to do this: a member of staff at one company actually told us they don't do that and in both cases, our switch was delayed even further following problems from their side.
It seems an unfortunate situation, given the very high charges on these business deemed tariffs and, as @Robin9 says, not a unique one.

MWT

Robin9 said:

@MWT Where do you think that responsibility should lie ?

I think there is quite a few issues with premises that are on business tariffs but ought to be domestic. @KnuttingAny is one; a recent poster had issues with a holiday chalet; others being sub-metered from shops.

Ofgem is probably a good place to start .

Re the other cases you mention, they are often correctly registered as business supplies, the holiday chalet for example is not residential, and often they are used to run a letting business, similarly if you purchase energy from your landlord it will often be at business rates.

There is nothing automatically wrong with there being a business supply in place, but it does need to be made very clear during the sale process and it would certainly be a good thing to make it easier to get the meter information updated faster.