Petition To Ban Exit Fees Within Suppliers

MattMattMattUK

AH55522 said:

How can it possibly be leal to penalise a customer for changing to a cheaper tariff with the same supplier?

Contract law. The customer signs up to a contract for a fixed rate of energy supply for a fixed term, with a penalty for breaking that contract. It is hardly rocket science.

MWT

AH55522 said:

Exit means leave! Or do you know a different meaning

Not all suppliers charge the exit fee if you are just changing tariff, but EDF do, and they make it clear that they do:

You are exiting the contract you freely entered into, you do not have to leave the supplier to have exited from the contract for that tariff....

gm0

Fixed or variable.  You choose.  Price.  Terms and conditions.   Deal or no deal

If the tariff price is set. On an assumed forward curve.  For a fixed term.  The assumptions of the product design and its *price* - are tied to the fixed term.  The assumed contribution to the energy supplier over the fixed term can be netted out by still allowing a break clause but with exit fees.   Or you assume no exit fees and slug the price a bit - to reflect assumptions on customer behaviour leavers and stayers.  It's a guessing vs future energy wholesale costs anyway.  

Then (if sensible) they forward buy wholesale energy in the market to hedge the energy they have now sold at fixed prices. And lock it in.  You may recall some energy company failures where they failed to buy the energy they had committed to sell at price X. Selling at fixed.  Only buying at spot prices. Betting the one would support the other. When wholesale prices shot up (Ukraine and other factors).  Goodbye.

If we could all reverse our decisions on long term commitments when the world moves against the fix (cheaper later).  Then the price of fixes would change.  And they would be less available.  

Which seems to be what you want - when you say "ban exit fees"

But I'm not signing.  Because - in my view - it's nonsense.

You could argue that the fixed vs floating in this market (or mortgages or other things with similar choices) should be better explained.  Or simpler.  

Perhaps just a simple floating variable tariff price. With energy suppliers limited to a regulated RPI-x% return as profit.  And without all the levies.  And a more reflective of system distribution and metering cost - standing charge.  I'd be a lot more sympathetic to that kind of simplification.  The current level of confusion is high

Many of the complexities added since 1998 have been painful as much as they have been helpful

lohr500

I believe you can't have your cake, and eat it.

WiserMiser

Your proposal would be subject to The Law of Unintended Consequences: there would be far fewer potentially good fixed deals offered.

Provided that suppliers make it absolutely clear that the fee is triggered by switching to one of their other tariffs more than 49 days before it ends (big font, prominent in the summary, not buried deep in Ts&Cs), then that's fine.  You pays your money, you takes your chances.

WiserMiser

Not easy to find your petition.  You need to quote your exact wording so that people can find it by seaching for change.org petition "xxxxxxxxx".

saajan_12

Ability to leave a FIXED term contract for free would defeat the purpose of fixed term contracts. The idea is you get certainty on a certain unit price meaning you can control your outgoings, regardless of what the energy market does. Its advantageous particularly if prices go up, and disadvantageous if prices go down.

However you can't get the best of both worlds, ie just pay the fixed price if prices go up, but switch to the flexi price if prices go down. Same as say fixed term savings accounts. You don't HAVE to pay the fee - you can just continue with the fixed deal as agreed.

So I think the FAIR thing is to keep these fees. However from my biased perspective as a customer, I also think its better to keep the fees as otherwise, the companies will just stop offering fixed deals or will up the price to the maximum they expect prices will be in 12 months. 

EssexHebridean

AH55522 said:

How can it possibly be leal to penalise a customer for changing to a cheaper tariff with the same supplier?

The benefit of the cheaper tariff is balanced with a penalty should you decide to leave it - even within the same supplier. While some do waive the exit fees if you jump ship to another of their tariffs, they’re not obliged to do so unless the terms and conditions say so I’m afraid. 

Scot_39

AH55522 said:

I, like I think most customers, assumed Exit Fees only applied if you change suppliers, but was shocked to find out EDF charged me £50 to switch to a cheaper tariff with them. Exit should mean leave no penalise customers for switching to a cjeaper tariff! I do not understand how this is legal.
For that reason I have started a petion to ban this practice. I hope all who can will sign.
Cannot post link but can be found on Change

In which case you and they would be wrong - only a limited number of suppliers have ever done so - and in some cases only on some deals and not others.

You enter a fixed deal allowing the supplier to plan / budget to supply you for a fixed period at a given rate.

It really doesn't matter whether you leave that deal for a cheaper price with them or leave the supplier for a cheaper price - they still potentially lose.

Some think its worth while retaining customers and chalk it up say to retention costs - others want you to honor the deal you signed.

michaels

It is a sad indictment of society that the OP has come up with this, it suggests a basic lack of understanding of maths/economics/contract law