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£200 to quit a fixed-rate energy deal you didn't even want!

Published 05th Nov 2010

Energy customers are being rolled on to fixed-rate energy contracts they never agreed to and then charged up to £200 to get out of them.

These unwitting consumers find they have been locked in to a new ­tariff when their old deal comes to an end. If they want to switch, ­unscrupulous energy companies are whacking them with a fine.

Automatic rollovers mostly apply to fixed-rate or discounted deals where the price of gas and electricity is fixed for a set period, and carry a penalty if you try to leave during this time.

According to comparison service Energy Helpline, the highest ­penalty charge is £200 from French-owned EDF on its 2015 fixed tariff. Its shorter-term, price-freeze deals have an early cancellation charge of £50 if you have both gas and electricity. It gives customers 30 days to switch from the new tariff without penalty.

British Gas, the biggest supplier, charges £70 to cancel its dual fuel price promise deals before they end. Scottish and ­Southern Energy charges £75, while Scottish Power’s ­penalties are £50 — both for dual fuel.

Neither npower nor E.on rolls you over to a new tariff with penalties. The suppliers write or email customers a month before the new deal starts, but consumer groups worry you could easily miss the notification.

Mark Todd, of Energy Helpline, says: ‘Even if you hold off from ­switching to a new supplier until your fixed deal ends, you still need to opt out from your old supplier to prevent you being flipped onto the next tariff, as it ­usually takes six weeks to switch.’

Audrey Gallacher, from the ­watchdog Consumer Focus, says: ‘Consumers who unexpectedly find themselves locked into long-term rollover deals are right to be angry.
‘These practices are relatively new in the domestic energy market. When one supplier does it, the others follow in a race to the bottom.’

The regulator Ofgem says it is ­‘concerned’ about households being rolled over to new contracts. It is ­consulting with suppliers on whether customers should have to actively opt-in to a new fixed-term period or restrict the length of time they’re locked in.

A similar practice existed in the ­telecoms market — but its regulator Ofcom has demanded providers reduce cancellation fees.

Energy companies have defended rollover ­contracts, claiming ­customers were given plenty of warning beforehand and could easily opt-out.

They claim renewable contracts are common for many services, such as magazine subscriptions and car ­insurance. The ­difference is that car insurers are legally required to roll over your car insurance to ensure you do not accidentally break the law.

Scottish Power says it writes twice to ­customers with deals about to end before the new rate starts. Both EDF and British Gas say customers liked the security of a fixed-price tariff.

A spokesman for British Gas says: ‘We write 30 days before maturity to give customers the chance to opt out of being rolled over. Most customers like to be moved on to another fixed-price contract, because they want the security of no sudden price rises.’


I Got My Money Back

Retired company manager Bryan Read, 63, fought the £50 penalty charge Scottish Power tried to levy when he switched supplier.

He had a discounted online energy deal with the company for both gas and electricity that ended in July.

As soon as he was notified that he would be moved on to their next discounted tariff, he checked energy prices and applied to move to npower.

Scottish Power, which is owned by Spanish firm Iberdrola, rang him and said it would cost him £50.

Mr Read, who lives with his wife Marcela in East London (both pictured above), says: ‘I was incandescent with such obvious sharp practice. The contract had clearly come
to an end.

‘After getting nowhere with customer services, I wrote to the chief executive, Nick Horler, who did reply with an apology and I didn’t have to pay the charge.

‘I’m a good advocate for myself, but someone else might well have caved in.’

A spokesman for Scottish Power, says: ‘We apologise to Mr Read for any inconvenience caused, and the matter has now been resolved.’

Source: ' MoneyMail '

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