Exit fees and Supply Date

Streaky_Bacon · 8 December 2018 at 10:18PM

Hi,
I am currently with Sainsburys Energy and I am looking to move to So Energy at the end of my current fixed term.

My current tariff is due to end on 31st Jan 2019.

As I understand it I can switch, without paying an exit fee, within the final 49 days, which I reckon is any time from Dec 14th onwards (the So Energy website, and a couple of other sites I saw, state 42 days, but I think this is a mistake).

The So Energy website also says that it takes them approx 21 days until the new supply start date.

Am I correct in thinking that the new supply start date is the important date when calculating the "final 49 days"?

If so, can I switch today, with a new supply date of approx 29th December, and safely avoid the fees?

Or, is it better to wait until at least 14th December? (and therefore give Sainsburys no chance to argue)

Any thoughts would be much appreciated.

[Deleted User] · 9 December 2018 at 10:33AM

@Streaky Bacon

There is always some confusion of is it 49 or 42 days.
From the Citizen Advice Bureau

When your fixed rate tariff ends
The price you pay for energy might go up when your contract ends - this depends on the type of tariff your supplier moves you to. If your new tariff is more expensive, you can change tariff or switch provider.

You’ll be given 42 to 49 days’ notice before your contract ends - you can use this time to decide if you want to stay with your supplier or switch. You won't have to pay an exit fee if you change supplier in this period.

You should complain to your supplier if you:

don’t get notice about the end of your fixed term contract;
are charged an exit fee to switch suppliers less than 42 days from the end of your contract

https://www.citizensadvice.org.uk/consumer/energy/energy-supply/problems-with-your-energy-bill/your-gas-or-electricity-supplier-has-put-up-its-prices/

So you should receive the notice from your existing supplier sometime in the period 49 to 42 days left after which you are free to switch away. However if they fail to notify you then after 42 days, you are free to switch.

Is the new deal at SO actually cheaper than your 1 year old tariff? Given the market prices rises over the last year, it is unusual to find a better deal today than a year ago.

If you feel that the SO deal wont be around for long then switch when you feel comfortable but I always wait unit the notice or 42nd day limit before switching.

System · 9 December 2018 at 10:55AM

gsmlnx wrote: »

@Streaky Bacon

There is always some confusion of is it 49 or 42 days.
From the Citizen Advice Bureau

https://www.citizensadvice.org.uk/consumer/energy/energy-supply/problems-with-your-energy-bill/your-gas-or-electricity-supplier-has-put-up-its-prices/

So you should receive the notice from your existing supplier sometime in the period 49 to 42 days left after which you are free to switch away. However if they fail to notify you then after 42 days, you are free to switch.

Is the new deal at SO actually cheaper than your 1 year old tariff? Given the market prices rises over the last year, it is unusual to find a better deal today than a year ago.

If you feel that the SO deal wont be around for long then switch when you feel comfortable but I always wait unit the notice or 42nd day limit before switching.

I agree. The key point here is that a fixed term contract exists between the supplier and the consumer. The Supply Licence requires suppliers to issue a notice in the period 49 to 42 days that the fixed term contract is coming to an end after which exit fees may not be charged if a consumer initiates a switch before the end of the fixed term. I also wait for either the Notice or 42 days before initiating a switch.

All that said, given that prices have risen but even SVTs are fixed from the 1st January what is the rush? Provided that the losing supplier receives industry notification that a transfer is in progress no later than end of contract plus 20 days, you have tariff price protection until the transfer goes through.

wavelets · 9 December 2018 at 11:04AM

Streaky_Bacon wrote: »

Hi,
I am currently with Sainsburys Energy and I am looking to move to So Energy at the end of my current fixed term.

My current tariff is due to end on 31st Jan 2019.

As I understand it I can switch, without paying an exit fee, within the final 49 days, which I reckon is any time from Dec 14th onwards (the So Energy website, and a couple of other sites I saw, state 42 days, but I think this is a mistake).

The So Energy website also says that it takes them approx 21 days until the new supply start date.

Am I correct in thinking that the new supply start date is the important date when calculating the "final 49 days"?

If so, can I switch today, with a new supply date of approx 29th December, and safely avoid the fees?

Or, is it better to wait until at least 14th December? (and therefore give Sainsburys no chance to argue)

Any thoughts would be much appreciated.

12. On a fix? You can switch again penalty-free in the last 49 days of your deal

In 2013, Ofgem introduced new rules to protect people on fixed tariff deals. This included banning suppliers from charging exit fees in the last seven weeks of fixed-term deals.
If you're near the end of a fix, you can't be charged exit fees for moving to a new deal – provided your switch completes within 49 days of your current deal ending – despite what some suppliers say.

Source: https://www.moneysavingexpert.com/utilities/you-switch-gas-electricity/

What ARE the rules?

Ofgem's rules state that customers must not be charged exit fees if they leave during or after the ‘switching window’, which is defined as "49 calendar days before a fixed-term contract ends".
You can apply to switch at any point during a fixed-term contract without having to pay exit fees, as long as the switch is actually completed during the switching window.

Source: https://www.moneysavingexpert.com/news/2017/03/regulator-to-quiz-energy-firms-over-exit-fees-after-mse-investigation/

The risk you take is that you usually cannot specify when a switch will actually occur, and even when you can there is no obligation for the new supplier to comply.
You get a 49 day switching window, so the safest approach is to not commence a switch until that window opens; switches should complete within 35 days of application at latest.

System · 9 December 2018 at 12:18PM

I am pretty sure that a Judge would take no notice whatsoever of what is posted on MSE. He/she would take note of what is contained in the Gas and Electricity Supply Licences Standard Licence Condition 22.C. There is no 7 week period: the Regulations clearly state that suppliers must issue notification to the consumer of the end of a fixed term contract no earlier than 49 days and no later than 42 days before contract end. Once this notice is issued, exit (termination) fees cannot be charged. The SLC also clearly lays out what happens if the supplier does not notify the consumer of pending contract end.

To avoid, what I accept is a remote possibility of being hit with an exit charge in the 49 to 42 day window, (but these are difficult times for suppliers so who knows) I think that I will stick to what it states in the Regulations before initiating a switch - but each to his own.

wavelets · 9 December 2018 at 1:09PM

Hengus wrote: »

I am pretty sure that a Judge would take no notice whatsoever of what is posted on MSE. ...

On that we can agree

(especially posts made by anonymous users on their forum

)

As I recall, the information MSE report was obtained by MSE direct from Ofgem, the industry regulator, after MSE contacted them directly to clarify the situation

But of course, if you think MSE is wrong/out of date, you can contact them directly with your evidence as they invite you to do at the end of the report

SPOTTED OUT OF DATE INFO/BROKEN LINKS? EMAIL: [EMAIL="brokenlink@moneysavingexpert.com?subject=BrokenLink-Please-state-page"]BROKENLINK@MONEYSAVINGEXPERT.COM[/EMAIL]

System · 9 December 2018 at 1:27PM

Respectfully, I suggest that you have a read of SLC22C and make up your own mind. If the ‘rule’ on termination (exit) fees is less than 50 days then why would Ofgem write down the notice requirements in the Licences in such a convoluted way? When not just state ‘ when a fixed term contract has less than 50 days to run to the contract end date, termination fees cannot be applied’ irrespective of what the supplier does or doesn’t do.

I suggest that we agree to disagree. At the end of the day, we are all responsible for the decisions that we take irrespective of where the advice comes from.

wavelets · 9 December 2018 at 1:40PM

Hengus wrote: »

Respectfully, I suggest that you have a read of SLC22C and make up your own mind. If the ‘rule’ on termination (exit) fees is less than 50 days then why would Ofgem write down the notice requirements in the Licences in such a convoluted way? When not just state ‘ when a fixed term contract has less than 50 days to run to the contract end date, termination fees cannot be applied’ irrespective of what the supplier does or doesn’t do.

I suggest that we agree to disagree. At the end of the day, we are all responsible for the decisions that we take irrespective of where the advice comes from.

The interpretation Ofgem have given to MSE, at MSE's request, is consistent with the wording of SLC22C.

The courts of appeal are full of people trying to question how contracts, laws etc are written and their correct interpretation.
In this case, MSE went to the regulator who wrote the terms and asked them what they considered was meant by them.

As for why the term was written as it was, I do not know (or care). Perhaps, as is claimed, hindsight is a wonderful thing, eh? :cool:

SLC22C is made up of 16 sub terms (possibly more depending on how you decide to count them) most of which has many sub sub terms etc.

Streaky_Bacon · 9 December 2018 at 1:47PM

Thanks for all of the comments. It seems that the picture is not as clear as I thought. I did find an August press release from Ofgem, which does seem to back up the 49 day window.

As I new user I can't post the link, but if you Google "ofgem exit fees" it is the top result.

The So Energy deal is only very slightly more expensive than my current deal (about £70/year according to the Cheap Energy Club), so as gmslnx suggests, my reason for switching is simply to lock that deal in now.

wavelets · 9 December 2018 at 1:55PM

Streaky_Bacon wrote: »

Thanks for all of the comments. It seems that the picture is not as clear as I thought. I did find an August press release from Ofgem, which does seem to back up the 49 day window.

As I new user I can't post the link, but if you Google "ofgem exit fees" it is the top result.

The So Energy deal is only very slightly more expensive than my current deal (about £70/year according to the Cheap Energy Club), so as gmslnx suggests, my reason for switching is simply to lock that deal in now.

I am unclear as to what exactly you are still unclear about :cool:

I had hoped the links to the appropriate MSE articles would have put those parts of SLC22C that apply to you here were simple enough to understand

Was there anthing you failed to understand from the MSE links? Or indeed a further question not yet answered here?

The issue with Google, as I understand it works, is that different people can be given search results in different orders
However, if it assists, the top result for me was this one
https://www.ofgem.gov.uk/publications-and-updates/british-gas-pays-out-265-million-over-invalid-exit-fees-and-overcharging

Not quite sure how BG agreeing to pay refunds for errors thay made has much relevance here :huh:

But the matter was reported and discussed on MSE at the time here:
https://www.moneysavingexpert.com/news/2018/08/ofgem-rules-on-british-gas-exit-fees-/

https://forums.moneysavingexpert.com/showthread.php?t=5888180

System · 9 December 2018 at 1:57PM

The Ofgem Press Release which came out when the change of SLCs was introduced was as follows:

Quote:

1. Fixed term contracts

Suppliers will be banned from increasing prices, or making other changes to fixed term contracts which are to the disadvantage of a customer. The only exceptions to this are “tracker” tariffs that follow an independent index over which the supplier has no control, or structured price increases set out in advance which are fully in line with consumer protection law. This new rule applies to any contracts entered into on or after July 15 2013.

Suppliers will be required to notify customers that their current fixed-term is coming to an end between 42 and 49 days before the contract ends.

Between this notification period and the end of the fixed term contract, suppliers will be banned from charging a termination fee should the customer decide to switch.

Unquote

I have seen nothing that changes this statement; however, I do accept that people now generically talk about a 49 day switching window. (In truth, it is 69 days but that is rarely mentioned by journalists)

In sum, it has to be your decision when to switch.

Exit fees and Supply Date

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