Deemed contract injustice

Fetternear1

Hi, I have a long running dispute with SEFE energy over the power supply to a derelict site I purchased in Scotland in 2021 so I could build a home for my retirement. I could not find the supplier, (previous owner had not had any communication from any supplier in the 5 years he owned the property and had no idea who was the supplier), or change it as the network operator and registered supplier had the supply down under an incorrect post code, this prevented online switches and no one answered phones at any of the companies we called due to covid. Found out it was SEFE when they sent me a bill for approx £76,023 (yes £76K) in late march this year for power consumed 31st Oct 22 to end of Jan 23 which I did not use. (meter had not moved since Oct 22).
They have continued to charge me £29 per day for standing and capacity charges (approx £1000 per month) since then and are still charging despite this dispute going to the Ombudsman. After no response to a letter sent to them by my Lawyer asking them to justify the ridiculous charges and also cease supplying electricity and a second letter reiterating the same, (I was not using any power and had demolished most of the buildings by then), I took the case to the ombudsman and asked they retain and examine the meter. SEFE then credited the account for the unused power but continued charging eye watering standing and capacity charges after we formally de energised the property on 27th April despite the ombudsman having confirmed in writing that they had negotiated a hold on the account until the dispute was settled (which they later claimed to be a misunderstanding - they only arranged a hold on debt collection "they said" but this was not what was in writing on their portal or in their recorded phone conversations). The ombudsman offered to fine SEFE £150 for poor dispute resolution and make them send me an apology but refused to say anything about the unfair standing charges and said it was outside of their remit. I then appealed this decision and that appeal was rejected with no proper comment as to why, despite giving them 4 good legal reason why SEFE were in the wrong over the continued and ongoing daily charges.

Now it looks like I will have to go to court to fight this remaining £10.5K (£10,500 hard earned pounds for absolutely nothing) debt plus charges for them to remove the meter (we had told them as early as July 31st, after the first Ombudsman's ruling, that they were free to remove the meter any time they wished now that the consumption was no longer in dispute (SSE has recorded consumption of 0KWhrs as far back as April 22 and erroneous estimates before that).
Where can I get some legal advice from an expert who knows deemed contracts and when they should start and terminate (we still don't have a copy of the contract despite asking for this on numerous occasions since 5th April). My understanding from the electricity act and from license agreements is that charges should cease when the customer ceases to take supply and while they can charge standing charges these should be fair and representative of the actual cost of making supply (which they are not and in any case doubled sometime during the period and no credit was given for capacity charges even after that contractual capacity with SSE was reduced to 2KVA and the site de energised (by SEFE's own definition and backed up by the NTOC).

They want to charge me £29 per day for a meter they did not install (meter has a note on it saying it is the property of Scottish Power PLC and screen says  "Battery Warning") and cannot, and did not, read for 6 months after the site was deenergised. Not to mention only informing me of the deemed contract (but failing to provide a copy of it when asked for) on may 11th but having claimed to have sent a letter on Jan 26th that was never received.
Clearly SEFE should not be able to do this. How can I fight it if the ombudsman is so ineffective and have just inflamed this dispute by lack of knowledge and delays?

Can I complain to SEFE's CEO or OFGEM- SEFE complaints department is next to useless and has ignored numerous letters and emails and an offer of negotiation and a compromise resolution (to pay the standing charges from the date they notified me of the deemed contract until the date the site was de energised). Do you, or anyone out there, know of other ways to get this story heard further up the food chain and try and get some resolution as this has gotten way out of hand.
The Ombudsman's office dilly dallied about till 13th of October after starting their investigation on the 14th of June.

I am at my wits end with this and it has severely affected my health. Any help would be greatly appreciated.

Regards
Pulling out hair!

ArbitraryRandom

There's really two matters...

1 is if you have a deemed contract if you haven't actually used any energy since taking ownership of the property. (warning, there's disagreement on the forum about when a deemed contract is in place as it's based on interpretation of an untested law - ofgem 'disapprove' of the practice, but don't seem to have changed the regulations to clarify the issue. There are examples on both sides of the debate and the amount of time it took for you to identify and notify the supplier may go against you). 

2 is the rates you are being charged under a deemed contract (can you clarify if this is a residential site or if you had intended to change the use of the site when you started building)? 

Oh - and three would be that meter removal/disconnection is at your cost... you have to arrange it with the DNO (not the supplier) and until you do then you are liable for standing charges (if there is a contract in place). 

Some reading you might find interesting here (re rates of standing charge and the case studies at the end of the doc when deemed contracts have been found to be in place despite no use) : https://partners.ombudsman-services.org/resources/guidance-notes/deemed-contracts-and-rates-june-2020

born_again

If this is the Co OP is talking about.
Then it's a business connection.

https://www.sefe-energy.co.uk/

QrizB

born_again said:

If this is the Co OP is talking about.
Then it's a business connection.
https://www.sefe-energy.co.uk/

Yes, OP seems to have purchased a commercial property without understanding quite what that involves.

Caveat emptor?

MultiFuelBurner

A costly mistake not making this a priority upon purchase.

rp1974

SEFE Energy are a business supplier,not domestic so many of the usual protections do not apply.

The exact details of the supply should've been clarified before purchase,whoever advised you and dealt with that has a bit of a case to answer,imho.
Where things like this are concerned the oh we don't know and can't be bothered finding out attitude simply isn't good enough,you didn't do yourself any favours by not keeping on top of this OP.
Leaving this unaddressed for an extended period wont have helped matters either,to get any kind of resolution it's quite likely needing legal involvment,though I'm not qualified to say so.

Petriix

Yes, deemed energy contracts are onerous which is why it's always recommend to contact the existing supplier on day 1 of taking responsibility for a property. That way you can establish exactly what the options are and minimise any costs.

If you made all reasonable attempts to contact them but they were unresponsive then you will have a better legal case than if you simply ignored the issue for a period of months. However you are likely to require a court case (or pre-court mediation) to reach a reasonable outcome.

You might have a case against your solicitor if they didn't give you the correct information during the purchase. I recall my conveyancer included a section in the handover documents detailing exactly how to find my existing supplier.

The ombudsman is really not an appropriate port of call in a case like this; as they say, they can't get involved in the contractual side of things. The only apparent ways to exit a deemed contract are to enter a different contract or to remove the supply; either way you need to have dialogue with the supplier. 

Fetternear1

Thank you for the comments above.

It is an ex commercial brown field derelict site but it did have a live power connection. Initially a tiny amount of power was used to boil a kettle and run some LED lights for some phases of the demolition and a bat survey but this consumption was so minimal it did not even register on the meter (which I now know is a current transformer type and may only register in 100's of KWhrs -  less than £100 worth of power was consumed and I have offered to pay for this consumption).

I bought the site to demolish the sheds and build a domestic home for my retirement. There is mitigation as to why I could not find the supplier. I did try. The property had not been in use for 10 years approx, (the roofs were caving in), and the seller had no knowledge of who was the supplier and had not had any contact from any supplier in the 5 years he owned the property. I now know how to find the supplier online from the MPAN number but did not know that then or that such huge standing charges could be due or even that deemed contracts existed. The fact that the supply was registered on the national data base on an incorrect post code prevented the use of online change websites and no one at any of the supply companies we contacted would even answer their inquiry phone lines. I guess I gave up a bit to easily in hindsight but we are where we are.

The facts remain that SEFE have to give me a copy of the deemed contract if I ask for it and they have not.
Their charges are not reasonable or representative of the actual costs of providing a supply.
They failed to notify me of the deemed contract until 4 months after they started making charges.
The first charges of £74,000 were for power I had not consumed hence my wanting to keep the meter as it provided the only evidence of the power actually consumed.

If SEFE was operating properly, on receipt of my first letter (requesting justification for the charges and asking for supply to cease), on the 5th April they could have been reasonably expected to reply with the actual meter readings, from the 1/2 hourly read meter, confirming no use of power at the site, sent us a form to fill in to terminate the supply and sent terms and details of the deemed contract that they had imposed without our knowledge. We would then have terminated the deemed contract and paid any dues from the time of notification of the deemed contract until the time the site was de energised.

It should have been simple but SEFE seem to have a vested interest in making it difficult - why, just to be nasty, or is it greed or just incompetence or laziness on the part of their dispute resolution and billing team?

The things I hoped to learn from this forum are where can I get expert legal advice on this matter as none of the companies I have contacted have any experience with deemed contracts and when they should terminate or how to fight unreasonable standing charges which are not representative of the actual costs of providing the supply. 

The obligations on the supplier are clearly laid out in their license agreement with OFGEM and this also states they are not allowed to charge termination charges which is clearly the case with a charge to remove a meter they did not install. There are also consumer protections in the electricity act in the section on deemed contracts and clause 8b in schedule 6 paragraph 3 seems to imply charges should stop when the consumer ceases to take supply (but is not specific on standing charges).

Also how can I make my complaint more effective i.e. sending it directly to higher officials in the company?

So in short - SEFE are trying to charge me £26 per day for provision of a meter they cannot read and SEFE did not provide, for 6 months after the property was formerly de energised (according to SEFE and NTOC definitions) and 7 months after SEFE were requested to cease supply. 5 Months of this delay is due to dithering by the Ombudsman's office and SEFE saying they can't do anything while they are considering the case (when the false consumption charges had already been dropped 4 months previously). It gets even more complicated as the Ombudsman's office had told me they had negotiated a hold on my account until this dispute was settled and then later redacted that saying it was only a hold on debt collection not on the accumulating daily charges.This is not what was discussed in recorded phone conversations with their advisor or in the written response to me on their portal.

There has to be some fairness in such things.

Any help on my original 2 questions regarding legal advice and improving my complaint would be most appreciated.

QrizB

I think we need to start at the beginning.

The supply of electricity is governed by the Energy Acts. These are statute law.

Energy suppliers are licensed by Ofgem (a quango under the relevant government department), which imposes Standard Licence Conditions on all suppliers. Suppliers have to abide by the terms of the SLCs.

The Acts and SLCs establish deemed contracts. As soon as someone takes responsibility for a property with an electricity supply, they are deemed to have a contract for supply of electricity from the property's supplier. Every supplier has a published set of deemed tariffs. For a domestic supply, these tariffs are capped by Ofgem. No such cap applies for a commercial electricity supply, as businesses are considered competent to negotiate their own contracts.

In your case, you purchased a commercial property and became the customer of a commercial energy supplier. (It's worth noting here that SEFE don't hold a domestic supply licence and are prohibited from supplying a domestic property.) On your purchase, you immediately commenced this deemed contact with SEFE. This contract will continue until you negotiate a different tariff with SEFE, or switch to a different supplier, or have the supply terminated and the meter removed.

I would expect every estate agent and property lawyer in the UK to be familiar with the idea of deemed contracts for energy supply, even if they didn't appreciate the difference between domestic and commercial tariffs. If you personally were ignorant, that is no mitigation and will hold no weight if it comes to legal proceedings. As owner of a property with an electrical supply, you are expected to know.

You seem to put some reliance on SEFE not being able to read the meter and it not having their name on it. Neither of these points is relevant to your case. Even if there is no possibility of reading the meter, you still have a deemed contract with SEFE. And meters are not changed when switching suppliers; all that happens is the central database is updated. It's entirely normal to have a meter from Company X but be supplied by Company Y.

If you still want legal advice, I think you should look for a law firm that deals with commercial property. But I suspect it's not going to help you.

ArbitraryRandom

Fetternear1 said:

...less than £100 worth of power was consumed and I have offered to pay for this consumption.
Consuming power settles the fact that a deemed contract would be in place. 

I now know how to find the supplier online from the MPAN number but did not know that then or that such huge standing charges could be due or even that deemed contracts existed.
Understandable, but googling 'how to find my energy supplier' would have given you the information relatively quickly, so not a particularly strong mitigation. 

The fact that the supply was registered on the national data base on an incorrect post code prevented the use of online change websites and no one at any of the supply companies we contacted would even answer their inquiry phone lines. 
This is a better mitigation - it wouldn't absolve you of responsibility, but might support a compromise if you contacted SEFE and they didn't respond (if you can prove it). 

The facts remain that SEFE have to give me a copy of the deemed contract if I ask for it and they have not.
If I'm understanding correctly, they stated they did send you it (by email, which is an accepted 'durable medium'). You not receiving it doesn't mean they didn't send it - if they have a record of sending it then it may have gone into your junk mail or perhaps to the wrong email address. When you told them you had not received it, did they send another copy?

Their charges are not reasonable or representative of the actual costs of providing a supply.
Did you read the link I provided to the case studies? The charges do not have to be representative of providing a supply to you, but to customers in your 'group'... hence it being relevant if the property was on a residential or commercial contract. I doubt you have the information needed to evaluate if the charges are actually reasonable at this stage. 

They failed to notify me of the deemed contract until 4 months after they started making charges.
I'm assuming this is the email that you failed to receive above? 

The first charges of £74,000 were for power I had not consumed hence my wanting to keep the meter as it provided the only evidence of the power actually consumed.
Which is entirely reasonable - but doesn't change that you are liable for the standing charges for the period the supply is in place. 

If SEFE was operating properly, on receipt of my first letter (requesting justification for the charges and asking for supply to cease), on the 5th April they could have been reasonably expected to reply with the actual meter readings, from the 1/2 hourly read meter, confirming no use of power at the site, sent us a form to fill in to terminate the supply and sent terms and details of the deemed contract that they had imposed without our knowledge. We would then have terminated the deemed contract and paid any dues from the time of notification of the deemed contract until the time the site was de energised.

You said they can't read the meter - so how were they to provide you with the 30 minute readings? Hence you wanting to retain the meter as evidence to dispute the charges. 

Also I think worth mentioning that (if we're talking 'reasonableness') you had a property for more than a year that you knew was capable of receiving power (and you used that power) but you're saying the deemed contract was 'imposed' on you without your knowledge? I'm not sure how reasonable that line of argument is in practice. 

And, from what you've said, you have already been given a reduction on what you 'owed' due to back billing being applied (you've only been charged from Oct 22, not from the date you took ownership) - which is something the energy company could have contested due to your failure to contact them and identify yourself. 

The things I hoped to learn from this forum are where can I get expert legal advice on this matter as none of the companies I have contacted have any experience with deemed contracts and when they should terminate or how to fight unreasonable standing charges which are not representative of the actual costs of providing the supply. 

If you are set to having legal advice, what you would want would be a solicitor with a background in commercial contract law - I would recommend trying the find a solicitor search here (pro search contract/ consumer utilities; it won't be a perfect match, but should highlight anyone with potentially relevant experience - you could also try dispute resolution/commercial mediation): https://solicitors.lawsociety.org.uk/ 

The obligations on the supplier are clearly laid out in their license agreement with OFGEM and this also states they are not allowed to charge termination charges which is clearly the case with a charge to remove a meter they did not install. There are also consumer protections in the electricity act in the section on deemed contracts and clause 8b in schedule 6 paragraph 3 seems to imply charges should stop when the consumer ceases to take supply (but is not specific on standing charges).

QrizB has provided the relevant legal basis for these points - but suffice to say they are permitted to charge for a disconnection (meter removal) and you are misinterpreting the electricity act (while you still have a meter, then you still have a supply under the act). 

Also how can I make my complaint more effective i.e. sending it directly to higher officials in the company?

With respect, at this stage the absolute best thing you can do is ensure you are taken seriously... so that means understanding where you have legitimate grounds for complaint and presenting those issues in a factual and clear manner - not pinging an email to anyone you can get the name of that sounds important... 

I hope at least some of the above is useful.

If, after reading the thought above, you're not spitting mad at me... then I would encourage you to reflect on your part in this situation and maybe that the best way forward is a less confrontational approach? 

And to keep us updated on what you decide and how it goes. 

Robin9

30 min data is not automatic with Commercial Meters which are AMR (automatic meter reading) rather than SMART - they are polled every 24 hours). I have gas an electric in two Church buildings. Comms with the Electric is fine but both gas have a separate battery/transmitter (all installed 2015)

Edit Many Commercial meters are still manually read.