Opposition proposals to freeze the price cap - fair for people who have fixed?

jamtheman80

pochase said:

DerwentMailman said:

I'm now wondering what justification some of the current remaining suppliers have for keeping an exit fee for any fixed tariffs.   Are there arguments for retaining an exit fee other than as a means of  milking the customer.  Maybe Ofgem should consider a ban on exit fees.

In the current situation everybody who has fixed up to mid July, and many of those after that will be winning if the predictions are true. So nobody will exit the fix. Hard to milk somebody on something that is not happening.

If the prices would come down we have the situation that the energy supplier and the customer both have bought an insurance, the customer that his rates will not go up, and the supplier hedged so that they will not lose money by providing the customer at the agreed rate.

If the prices come down and the customer goes onto SVT to save money, the supplier still has to but expensive energy for this customer, but can only charge at SVT rates.

The exit fees cover this loss the energy supplier would make otherwise. Otherwise they could also say they don't allow the customer to leave and they have to stick with the expensive prices. It is up to you if you want to take a contract with exit fee, but once you agree the exit fees are valid. You might have seen that for quite a while contracts with exit fees where less expensive rate wise.

If you take out a mobile contract for 2 years and you decide you want to change suppliers after a year what happens? Will your supplier tell you you  are free to go, or will they tell you to stick with them or pay up? 

Looks to me that it is very much happening. Funny how the unthinkable becomes reality very quickly, isnt it? 

I don't see any legitimate comparison between this shambles and signing a mobile contract. Heat and electricity are essential commodities, whose price is capped according to a timetable and it was wrong people felt compelled to sign up to fixed deals in the summer (an action they were advised to consider by Martin Lewis) because they were lower than the proposed price increase according to the governments own regulator. I find all this pedantry on exit fees morally grotesque.