WIREDGOV

Ofgem has worked  with npower and E.ON, after they wrongly told customers whose contract was due to end that they’d incur exit fees if they switched supplier during the last 49 days of a contract (the ‘switching window’).

Under Ofgem’s licence conditions, suppliers cannot charge exit fees for switches within the 49-day ‘switching window’ before a fixed term contract ends.(1)

Ofgem found that between June 2016 and February 2017, npower sent 22,000 customers a letter incorrectly telling them that they would incur exit fees if they switched during the ‘switching window’. 

Ofgem found that between October 2013 and February 2017, E.ON call centre advisors incorrectly told 450 customers that they would incur exit fees if they switched during the ‘switching window’.

In both cases, Ofgem found no customers who had been wrongly charged exit fees as a result of the misinformation. 

The two suppliers have since taken steps to put things right. E.ON has updated its call centre scripts, and paid £21,000 redress to misadvised customers who consequently cancelled or delayed switches. Npower has corrected the letter it sends to customers during the ‘switching window’, and in March compensated four customers who cancelled their switches as a result of receiving an incorrect letter.

Ofgem has closed these compliance cases without taking formal enforcement action, taking into account the steps that E.ON and npower have taken to improve their performance and the small number of customers who suffered direct financial loss due to the failures.

These issues were first brought to Ofgem’s attention by consumer affairs website MoneySavingExpert.com this year. (2) Ofgem is grateful to MoneySavingExpert.com for raising these issues. It’s essential that all suppliers get these fundamental consumer protections right, including the ability to switch without incurring exit fees during the 49 day ‘switching window’ before a fixed deal ends.

Notes to editors

1. Under Ofgem’s licence conditions, suppliers must contact consumers between 42-49 days before a fixed deal ends, and provide important information including telling them they can switch without being charged an exit fee.  The term ‘exit fees’  refers to Termination Fees as defined in the Supply Licence for the supply of Gas/Electricity. 
2. MoneySavingExpert.com raised concerns with Ofgem that British Gas, npower and E.ON were misinforming customers about exit fees during the switching window. 
3. Ofgem has since opened an investigation into switching terms by British Gas, including the requirement to waive termination fees. The opening of this investigation does not imply that we have made any findings about non-compliance. 

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About Ofgem

Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.

For facts, figures and information about Ofgem’s work, see Energy facts and figures or visit the Ofgem Data Portal.