British Gas charges customer exit fees to switch tariff WITHIN penalty-free switching window

MoneySavingExpert.com has been campaigning on energy exit fees in recent months. In July, regulator Ofgem launched an investigation into British Gas's switching terms, after MoneySavingExpert presented evidence showing some customers with fixes ending were wrongly told they'd have to pay up to £60 to switch.

Now another customer has complained British Gas has got it wrong. Dickie Osborne, 68, stopped using British Gas as his electricity and gas provider on 28 August, and was sent a final bill stating he'd been charged a £20 "cancellation fee" for each fuel.

But as a regular MoneySavingExpert user, Dickie, from Margate in Kent, knew he shouldn't have been charged, as his deal was due to end on 3 October – just 36 days later. Under Ofgem rules, when customers switch in the last 49 days of a fixed deal, they do not have to pay an exit fee.

British Gas says it charged Dickie because he first told the company he wanted to switch before the penalty-free switching window opened, even though he only completed the switch within it. But Ofgem's rules state it's when you complete the switch rather than when you start it which counts – and British Gas has now refunded Dickie the exit fees.

To see if you can switch and save £100s, use our free Cheap Energy Club.

'My initial thought was... this is a bit naughty'

Dickie first decided he definitely wanted to leave British Gas on 8 August (so outside the penalty-free switching window), after finding a better deal. Having contacted the company to say he wanted to leave, he started the switching process on 9 August, but remained a British Gas customer until the switch was completed on 28 August (by which time the penalty-free switching window had opened).

Under Ofgem rules, 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.

In practice it's best to apply within the switching window, as you can't set an exact date for the switch to complete and if it completes before the window opens you could still be charged exit fees. But if you do start a switch outside the window but complete it within it, as Dickie did, you shouldn't be charged.

When Dickie found out he'd been charged £40 in exit fees, he called British Gas straightaway. He said: "I was told that the company always charged an exit fee, and that if I stayed with them there would be no charge.

"My initial thought was – this is a bit naughty. I follow MSE all the time, so I remember the rule and was able to explain it. The person on the phone came back saying in this instance, as I was on the MSE collective, there would be no charge and they would credit me back the two £20 fees.

"I am sure most working people would just accept the exit charge, but I was watching carefully, knowing the rules in advance."

Under Ofgem rules, when customers switch in the last 49 days of a fixed deal, they do not have to pay an exit fee

What does British Gas say?

When we first contacted British Gas with details of Dickie's case, it insisted it had been right to charge Dickie because he'd initiated the switch outside the penalty-free switching window – and said he'd only been refunded as a "goodwill gesture".

After we challenged this, the energy firm subsequently confirmed it does comply with Ofgem's rules and that customers completing a switch within 49 days of their fix ending should not be charged.

A spokesperson said: "Mr Osborne began his switch outside of the 49-day window and exit fees were initially applied. His switch was completed inside the window and the fees were removed.

"We've discussed this with the customer and he has confirmed he is happy with the way his query was dealt with."

What should I do when my fix is coming to an end?

Before your energy fix expires, do a full market comparison to see if you can save by switching – you can do this using our free Cheap Energy Club. If you don't switch, the usual practice is for your provider to automatically move you onto its 'standard' tariff, which is likely to be much more expensive.

Under Ofgem rules you should not be charged exit fees if you complete your switch within 49 days of your fix ending.

If you're on a super-cheap fix and will end up paying more after you move, you may not want to switch as soon as the 49-day window opens. But switches can take up to six weeks to go through, though many suppliers promise to do it within 21 days, so make sure you leave enough time to move across before your fix ends.

If you think you've been wrongly charged exit fees, let us know at news@moneysavingexpert.com.