Th
e latest in a long line of promised amendments to rules governing the business energy market are finally coming into effect.
Having been in the pipeline for months and having been debated and consulted for years, Ofgem are finally bringing new rules to protect business energy customers from 30th April 2015.
There is a catch however, as ever.
The new rules only affect customers who enter a contract on or after the 30th April this year, as a result for those companies still serving time under their existing terms there will be no change.
From April 30th however, for contracts entered into on or after the 30th April 2015, business energy suppliers are obligated to accept termination notice from their customers anything up to 30 days’ before their contract end.
Until that point, or until a new contract has been agreed after that point, suppliers are able to continue to operate their own rules on what is an acceptable period before which their termination window closes. For many suppliers this is three months before the end of the contract end date, more than 3 times the period that Ofgem have now implemented.
In addition, suppliers are now obligated to provide their customers’ annual consumption, the current prices they are paying and the new renewal prices that will apply if they do not take action.
Whilst it might seem strange that such basic customer engagement needs regulation to force it through, the reality is that energy suppliers haven’t won any awards for transparency in recent years.
However the biggest failing of suppliers and one of the largest obstacles to competition in the business energy market has also been tackled.
Whilst engaging in the market, and particularly using a service like ours, means that Ofgem’s moves on terminations and renewal rates are somewhat superfluous for our clients, one element that no one has been able to control is the thoroughness with which energy suppliers process customers’ termination notices.
This failure of suppliers to process terminations in a timely and accurate manner can and often does lead to customers being held on penalty rates through no fault of their own.
Whilst our contract lifetime service takes care of the termination and supplier management processes and so our clients are protected from these prevalent issues it is still encouraging to know that suppliers are now required by the regulator to acknowledge termination within 5 working days of receipt.
Credit where it’s due, better late than never Ofgem