Energy contracts and marketing
Since the introduction of full retail competition in energy supply, the number of complaints to EWON has been relatively low compared to how many customers have switched retailers or moved from a standard to a negotiated contract with their current retailer. Complaints about retail competition include marketing conduct, particularly by door-to-door salespeople, incorrect transfers or delays in transfer, and termination charges. Retailers are responsible for the activities of their marketers but you need to be very careful before signing any contract.
Knock, knock: who’s there?
Customers have complained to EWON about misrepresentation by marketers. For example, marketers have told some customers they were ‘from the government’, or that their current retailer ‘is being taken over’ or ‘going out of business’.
Some customers, particularly those from culturally and linguistically diverse backgrounds, have said they feel pressured to provide copies of their bills and to sign the contract, especially if the marketer says they are ‘from the government’.
In some cases, family members have complained that their ill or elderly parents have signed a contract without understanding what it really was.
All customers have a right to be supplied essential services under a standard contract, so there is no obligation for you to sign a negotiated contract. In turn, retailers are under no obligation to offer a negotiated contract to customers.
Account holders
EWON has received a number of complaints from people who say that although they are the current account holder, a family member or other household member has signed a negotiated contract. This has had the effect of cancelling their current account without their knowledge or permission, and in some cases moved their account to a different retailer. EWON is discussing this issue with the Office of Fair Trading.
Show your current bills
If you are interested in a negotiated contract, the marketer may ask to see your current bills so they can assess your level of consumption. This will help the marketer estimate the terms of the proposed contract. You are not under any obligation to show a marketer your bills. However if you do, make sure the bills are from your current property. Some customers who had recently moved got into difficulties because they presented old bills from their previous address.
Can I change my mind?
There is a ten-day cooling off period for all negotiated contracts, so there is leeway for customers who change their mind. In spite of this, you should scrutinise the material given to you by the marketer to ensure there are no surprises later on.
Will prices be fixed?
Some customers complain that their energy charges have increased, despite them having signed a contract for an agreed rate. Check the terms and conditions of the contract carefully to see whether tariffs are fixed or not. There are a number of factors outside the retailer’s control (eg network charge increases) which can mean that what you are originally quoted as a saving, may change in the future.
One bill or two?
Some customers sign a negotiated contract for ‘dual fuel’ (electricity and gas) because they want to receive one bill for both, but find they continue to receive separate bills. Most retailers cannot produce combined bills because electricity and gas meters are often read at different times, by different network companies. Check the billing process with the retailer before you sign.
Account transfer delay
If you agree to a negotiated contract, you should be aware that the transfer does not happen immediately, but will take place after the next meter reading. Sometimes this can take a few months. In the case of a dual fuel contract, the gas transfer will not happen until the electricity meter has been read (and vice versa), and the delay confuses some customers who continue to receive bills from their current retailer.
The delay also leads some customers to believe the transfer didn’t go through, or to forget they signed with another retailer. When you agree to the contract, make a note of the ‘estimated transfer date’ which will be on the contract. Once the account has been transferred, expect to receive a final bill from your original retailer.
Early termination fees
As with many fixed term contracts, there may be fees associated with early termination of the contract. Most contracts are fixed for three years, so you need to be confident that you will be living in the same property for the duration of the contract, or that there is some way to transfer it to a different property without penalty. It is the retailer’s responsibility to provide ‘sufficient disclosure’ of termination fees, and the exact amount for such fees should be clearly stated in the contract terms and conditions. If they aren’t, ask the retailer about what fees they charge for early termination.
Buyer beware
It’s a good idea to keep all the materials (including promotional brochures) that the marketer provides with the contract, as well as a record of the date and time, and who contacted you or came to your door. Most importantly if it's hard to read the fine print, ask someone you trust to do it for you.
<< Back to Consumer Issues
